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    LAWRENCE E. BOVINETT et al., Plaintiffs-Appellants and Cross-Appellees, v. EDWARD J. ROLLBERG et al., Defendants-Appellees and Cross-Appellees—(Mabel Eck et al., Cross-Appellants).—(Stella Neuner, Ex’r of the Estate of Herbert J. Neuner, et al., Plaintiffs, v. Edward J. Rollberg et al., Defendants.)
    Fifth District
    No. 81—282
    Opinion filed August 23, 1982.

      James W. McRoberts, Jr., of McRoberts, Sheppard, McRoberts & Wimmer, of East St. Louis, for appellants.
    David Ulkus, of Fleming & Fleming, of O’Fallon, for appellees Edward J. Rollberg and Patti L. Rollberg.
    William R. Hotto, of Hotto & Dusek, of Fairview Heights, for appellees Mabel Eck and Anne Pennington.
   JUSTICE JONES

delivered the opinion of the court:

This appeal considers the validity of two installment contracts for deed to approximately five acres of real estate in St. Clair County. Two lawsuits resulted from the two contracts and they were ultimately consolidated for trial and this appeal. A prior lawsuit involving one of the contracts resulted in an appeal to this court. Rather than consider the case on its merits, we reversed and remanded for the purpose of adding necessary parties and for such additional pleading as the circumstances might require. (Bovinett v. Rollberg (1979), 73 Ill. App. 3d 490, 392 N.E.2d 27.) An additional lawsuit was filed and the trial of the consolidated cases resulted in the instant appeal. Complex pleadings and multiple issues require a rather detailed statement of facts.

Prior to June 28, 1974, John and Stella Neuner (Neuners) were the owners in fee of the real estate in question which was improved with a house and outbuildings. On that date they entered into a contract for deed with Edward J. and Patti L. Rollberg (Rollbergs). (The instrument is styled “Bond for Deed,” but its form and terminology are that of a contract for deed, not a bond for deed. Accordingly, we will refer to it as a contract for deed.) The contract price was $34,320, payable 10% down and the balance in monthly installments of $225, inclusive of interest at 6%, for 36 months. The amount remaining due and unpaid on July 1, 1977, was payable in a lump sum, referred to by the parties as the balloon payment. The amount due for the balloon payment would be $28,112.47. The contract further provided that the buyers agreed to pay the taxes levied against the premises for 1976 and subsequent years. In the event the purchasers failed to make the payments and perform the agreements specified within 60 days after they became due, the payments made would be forfeited to the sellers as liquidated damages. Time was declared to be of the essence, and the sellers could declare the contract forfeited and retake possession of the premises by serving notice of their intent to do so upon the buyers. The contract also contained the following provisions:

“No assignment of this contract shall be valid unless consent in writing is first had of the party of the first part [the sellers] and endorsed hereon. Party of the second part [the purchasers] shall not do or permit to be done on said property, anything out of which a mechanic’s or other lien could arise, without written consent of the party of the first part. Notice is hereby given that party of the first part shall not be responsible to anyone for anything so done.”

Pursuant to the contract, the Rollbergs took possession of the property and commenced the monthly payments. Prior to the due date of the balloon payment, the Rollbergs entered into a standard listing contract with a real estate sales agency for sale of the property. The agency located a prospective buyer of the property in the persons of Lawrence E. and Beverly A. Bovinett (Bovinetts). On March 7, 1977, still prior to the due date of the balloon payment and following negotiations between the Rollbergs and the Bovinetts conducted by a representative of the real estate sales agency, an alleged, but highly disputed, contract for sale was made whereby the Rollbergs agreed to sell the property to the Bovinetts for $52,500. The facts surrounding the execution of this Rollberg-Bovinett contract are set forth in our opinion in the prior appeal and need not be repeated here. It should be noted, however, that the alleged agreement between the Rollbergs and the Bovinetts was not an assignment of the Rollbergs’ interest in the Neuners’ contract, but a separate and subsequent contract for deed.

Two days after the alleged execution of the Rollberg-Bovinett contract, Mr. Rollberg notified the sales agency that he would not sell the property for less than $55,000 and that he had not agreed to sell for $52,500. The disagreement precipitated the earlier suit for specific performance to which we have alluded. That suit was filed on May 25, 1977, approximately five weeks before the balloon payment due date on the Neuners’ contract of July 1, 1977.

The complaint by the Bovinetts was in two counts. Count I was based on an oral agreement and count II was based on a written agreement for sale of the real estate by the Rollbergs to the Bovinetts. The complaint was against both the Rollbergs and the Neuners, but the Neuners were nominal parties only. Paragraph 7 of both counts of the complaint recited that in the event the Neuners would “exercise any right they have to alter title to conveyance, forfeiture, suffering an assignment or otherwise, this court could be deprived of its jurisdiction over the subject matter of this proceeding for enforcement of plaintiffs’ contract rights, to the irreparable injury of plaintiffs.” The prayer of the complaint was (a) that the Rollbergs be directed to specifically perform the contract for sale and (b) that the defendants be enjoined and restrained from conveying or otherwise alienating or altering the rights of the parties in and to the real estate pending final determination of the proceeding. The complaint of the Bovinetts did not allege in any way, nor did it suggest, that the Neuners had violated any agreement with either the Rollbergs or the Bovinetts, or that the Neuners were in any way at fault.

On June 2, 1977, the trial court issued a temporary restraining order which included the following findings and order:

“It is alleged that the installment sales contract between Neuners and Rollbergs may contain the usual provisions for assignment, forfeiture, reversion, and other changes in the title to said real estate. It further appears that, since whatever right plaintiffs have are derived from defendants Rollberg, but that they have no contract with defendants Neuner, it is necessary in order to enforce plaintiffs’ rights in this proceeding that the status quo be maintained between defendants Rollberg and defendants Neuner, thereby protecting the jurisdiction of this Court over the subject matter of this proceeding.
NOW, THEREFORE, IT IS ORDERED, ADJUDGED AND DECREED that defendants, and each of them are enjoined and restrained from assigning, forfeiting, transferring or conveying whatever interest they may have, whether legal or equitable, in real estate described in the Complaint filed herein, *** or from suffering such assignment, forfeiture, transfer or conveyance. It is the intention of this order that the title and existing contractual relationships relating to the title to said real estate remain intact and unchanged, pending the further order of this Court.”

By an order of June 9, 1977, the temporary restraining order was continued in effect as a preliminary injunction pending final determination of the litigation. The Rollbergs and the Bovinetts were present at the hearing on June 9, but the Neuners were not. On July 26, 1977, on motion of the Rollbergs, the preliminary injunction was amended so as to permit the Neuners to convey the premises to the Rollbergs in fulfillment of the contract. The Bovinetts filed their consent to the amendment.

On September 27, 1977, following a trial on the merits, the trial court entered an order finding that a valid contract for sale had been entered into by the Rollbergs and the Bovinetts and directed the Rollbergs to comply. The order of September 27, 1977, made no mention of the Neuners. The Neuners had not been represented at the trial but Mrs. Neuner had attended as a spectator. In response to a question directed to her by the court at the conclusion of the hearing, Mrs. Neuner said something to the effect that all they (the Neuners) wanted was their money.

On October 6, 1977, a post-trial motion was filed by the Rollbergs. On November 18, 1977, for the first time, the Neuners entered the case by filing a motion for an order confirming that the preliminary injunction had been dissolved. Their motion alleged that the Rollbergs were in default on their contract for more than 60 days and that they, the Neuners, had elected to terminate the contract for deed with the Rollbergs and declare a forfeiture of the payments made. The Neuners’ motion also asserted that the preliminary injunction against them was improperly sought by the Bovinetts who had no contractual rights with them. The motion concluded with an allegation that the order of September 28, 1977, “disposes of the controversy on its merits and renders the temporary injunction functus offcio [sic].”

On December 22, 1977, the court entered an order which denied the Rollbergs’ post-trial motion. The order also provided that the “temporary injunction is continued in effect and modified in that it will terminate as to defendants Neuner in 30 days or upon the filing of a notice of appeal by defendants Rollberg, whichever is sooner.” On January 12, 1978, the Rollbergs filed a notice of appeal and a motion for stay and continuance of injunction pending appeal. They alleged in their motion for stay that they would be deprived of an effective appeal if judgment were executed upon or if the Neuners were allowed to forfeit their contract.

On January 23, 1978, the Bovinetts filed their own notice of appeal from that portion of the order of December 22, 1977, which terminated the preliminary injunction against the Neuners. There were still no allegations of any wrongdoing or defalcation upon the part of the Neuners. On February 23, 1978, the Bovinetts filed in the trial court a motion for stay of judgment pending appeal. The motion alleged that the Neuners had threatened to forfeit and terminate the interest of the Rollbergs in the subject property and that if they were not stayed from doing so, the judgment of the court would be rendered moot. The motion further alleged that “no harm will be caused to the Neuners by the stay requested, because there are sufficient funds from the proceeds of the sale ordered to pay the balance under their bond for deed in full, with interest at the rate they agreed upon, to the date it is paid.”

Also filed on February 23, 1978, was a suggestion of the death of John Neuner. He had left a will and its executor was substituted as a party. The widow of John Neuner, defendant Stella Neuner, succeeded to his interest in the subject property. Subsequently, Stella Neuner conveyed all her interest in the subject property to Mabel Eck and Anne Pennington and they were substituted as parties in the place and stead of the Neuners. For convenience, however, we will hereafter refer to the interests of Eck and Pennington as the Neuners’.

On March 3, 1978, the trial court denied the motions for stay of the Bovinetts and the Rollbergs. On March 22, 1978, this court granted a motion by the Rollbergs for stay of the trial court’s orders of September 27, 1977, and December 22, 1977, pending the determination of the appeal. The opinion of this court in that prior appeal was filed on March 22, 1979.

We must backtrack in our chronology to pick up the commencement of the second lawsuit with which we are concerned. That second lawsuit was a forcible entry and detainer action by the Neuners against the Rollbergs in which the Neuners sought to declare their contract with the Rollbergs forfeited and regain possession of the premises. On January 12, 1978, the Rollbergs filed their notice of appeal from the trial court’s orders of September 27, 1977, and December 22, 1977. By the terms of the December 22, 1977, order, the preliminary injunction which had been issued against the Neuners expired. On January 14, 1978, the Neuners served a notice of forfeiture of contract and, on March 15, 1978, a demand for possession, upon the Rollbergs. On April 28, 1978, the Neuners filed the forcible entry and detainer suit. On May 11, 1978, the Bovinetts filed a petition for leave to intervene in, and a motion to dismiss, the forcible entry and detainer action. Both were denied on May 15, 1978. No further action was taken in the forcible entry and detainer suit until after the opinion of this court had been filed in the prior appeal.

On April 24, 1980, the suit of the Bovinetts against the Rollbergs and the Neuners for specific performance was consolidated for trial with the suit of the Neuners against the Rollbergs for forcible entry and detainer. On May 6, 1980, the Rollbergs filed a counterclaim against the Neuners in the forcible entry and detainer action asking for a judgment against the Neuners for unjust enrichment in the event the contract between the Neuners and the Rollbergs was declared forfeited.

On November 10, 1980, the Bovinetts, in accord with the directive of this court in its opinion in the prior appeal, filed an amended complaint for specific performance and relief incidental thereto against the Rollbergs and the Neuners. It alleged that under the terms of the contract for deed between the Neuners and the Rollbergs, “Rollbergs have the right to pay a certain sum of money to Neuners, at any time, whereupon Neuners have the duty to convey and deliver merchantable title to said real estate of Rollbergs.” (Emphasis added.) There were no allegations of wrongdoing or defalcation upon the part of the Neuners.

On November 17, 1980, the Neuners filed an answer and affirmative defenses to the Bovinetts’ amended complaint for specific performance, asserting that there was no contractual relation between the Bovinetts and themselves and therefore no basis for a specific performance suit. The affirmative defenses alleged further that the Bovinetts’ delay of SVz years in seeking any relief from them was unreasonable in that the value of the property had greatly appreciated and their assertion of the cause of action against the Rollbergs had deprived them, the Neuners, of the use and enjoyment of their property.

On November 19, 1980, the Rollbergs filed in both cases a counterclaim for declaratory relief against the Neuners. They alleged, among other things, that the mortgage necessary to make the balloon payment had been refused because of the litigation between the Bovinetts and themselves and that, upon being refused mortgage money, they had offered to continue making the monthly contract payments to the Neuners, but such payments had been refused. The prayer of the counterclaim was that the Rollbergs be relieved of the forfeiture declared by the Neuners, or that the court stay enforcement of any judgment for possession for a period of 60 days pursuant to section 13 of the Forcible Entry and Detainer Act (Ill. Rev. Stat. 1979, ch. 57, par. 13) and order the Neuners to convey the property to the Rollbergs upon receiving tender of the balance due.

Responsive pleadings were filed by the parties, essentially denying all affirmative allegations respectively made against them. Trial was held on November 20, 1980, with all parties present. The evidence relating to the transaction between the Rollbergs and the Bovinetts was essentially the same as that adduced in the prior trial and described in our opinion in the prior appeal. Additional evidence was produced as it related to the Neuners and the forcible entry and detainer action. Mr. Rollberg admitted that he had not made the balloon payment of $28,112.47 due on July 1, 1977, or any part of it. He also admitted that, contrary to the terms of the contract for deed, he had not paid the real estate taxes for the years 1977 and 1978. He testified that he had had a loan on the premises authorized by Illini Federal Savings and Loan Association in the amount of $29,000 for the purpose of making the balloon payment due the Neuners. However, the loan had been later refused by Illini when they learned of the litigation between the Bovinetts and the Rollbergs. He related that he had paid the Neuners $3,423 down and $225 per month for 36 months, which included interest at 6% on the declining balance. He had offered to continue these monthly payments after the loan had been refused, but Stella Neuner had declined to accept any further monthly payments. Mr. Rollberg admitted to being served with the notice of forfeiture on January 13, 1978, and with the demand for possession on March 15, 1978. Mr. Rollberg also told of several repairs and improvements he had made to the property, including the installation of a new furnace and air conditioner. He had expended approximately $6,000 for materials and had done all the labor himself. He admitted that, as of the time of trial, he had occupied the premises for 76 or 77 months and that, based on what he had paid the Neuners, this would amount to about $154 a month. He also stated that a fair rental value of the property would be $300 to $400 per month.

Mr. Bovinett testified that in November or December of 1977, he, through his attorney, had offered to pay the Neuners all the money they were due under their contract with the Rollbergs and to substitute himself for the Rollbergs. His offer had been refused.

At the conclusion of the trial the court took the case under advisement and briefs were submitted by all parties. Judgment was entered on February 23, 1981, in which the court made extensive findings of fact. Among those findings were that the Bovinetts had a valid contract for deed with the Rollbergs and, upon payment of the agreed amount, they were entitled to a deed from the Rollbergs. At the time of execution of the Rollberg-Bovinett contract in March 1977, and continuing to July 1, 1977, the Rollbergs were current in their payments to the Neuners. The Rollbergs had offered to the Neuners to continue the monthly payments, and the Bovinetts had offered to purchase the Neuners’ interest, which offers were declined by the Neuners. The Rollbergs were in default under the terms of their contract with the Neuners and the Neuners were entitled to a judgment for possession. The judgment then recited that, “at the request of the parties and in anticipation of the filing of a motion for stay of enforcement of the judgment for possession, the following findings are made:

A. More than 75% of the balance of the amount due from Rollbergs to Neuners or their successors remains unpaid.
B. On equitable considerations, the enforcement of the judg-.. ment for possession should be stayed for 60 days from the date of the final order herein to enable the amount due to Neuners’ successors to be paid as provided for herein.”

The judgment then recited that the court required additional authority and/or evidence to determine the rate and amount of interest required to be paid by or on behalf of the Rollbergs to the Neuners from July 1,1977, to the time of payment of the principal.

The dispositional portion of the judgment designated an escrow agent for the accomplishment of the terms of the judgment. The Bovinetts were directed to deposit $52,500 with the escrow agent, less the earnest money paid and less $510 per month damages (assessed against the Rollbergs pursuant to a contract provision) for withholding of possession for the months of July 1977 until possession would be delivered. The Rollbergs were to deliver to the escrow agent a deed to the Bovinetts, and the Neuners were to deliver to the escrow agent a deed to the Rollbergs. The escrow agent was directed to pay the Neuners the balloon payment of $28,112.47, plus interest found due, to the Neuners. The balance in the escrow account was then to be paid to the Rollbergs. Judgment for possession was entered for the Neuners but enforcement was stayed for 60 days to enable the parties to comply with the above orders. Hearing was set for March 11, 1981, to determine the rate of interest to be paid the Neuners from July 1, 1978, to the date of payment of the principal. It was recited that the judgment would not be final and enforceable until the subsequent order determining interest was entered.

Following the hearing on March 11, 1981, the court entered an order fixing the rate of interest to be paid to the Neuners “pursuant to Illinois Revised Statutes, ch. 72 [sic, should be 74], sec. 2,” at 5% per annum, payable from July 1, 1977. The same order also denied a motion by the Neuners to reconsider the order for stay. The Neuners’ motion had attacked the portion of the judgment of February 23, 1981, which granted a stay of execution of the judgment for possession for a period of 60 days pursuant to section 13 of the Forcible Entry and Detainer Act. The motion set forth several arguments based upon equitable considerations. Among these were the fact that the Rollbergs had been found by the court to have breached two contracts for sale but nevertheless stood to gain a windfall profit because of the escalation in the price of the property.

The Neuners next filed a motion to reconsider the judgment of February 23, 1981. The Rollbergs filed a motion to modify the judgment by deleting the allowance of $510 per month for withholding of possession from the Bovinetts. The Bovinetts also filed a motion to amend the judgment. In the Bovinetts’ motion it was pointed out that after deducting broker commissions and the $510 per month hold-over rent as provided by the contract and allowed by the judgment, there would be only $26,400 remaining on the $52,500 purchase price to apply to the debt remaining due to the Neuners, which amounted to $33,383.56 plus other costs at the time. The deficiency, the motion stated, was at least $6,983.56, plus expenses of the transfer and escrow. The motion recited that further instructions would be required as to how the shortage would be dealt with.

The Bovinetts also filed a motion for stay of enforcement of judgment pursuant to section 13 of the Forcible Entry and Detainer Act (111. Rev. Stat. 1979, ch. 57, par. 13). The basis of the motion was that since they, the Bovinetts, had offered to pay the Neuners the amount owed by the Rollbergs and that offer had been refused, the protests of nonpayment by the Neuners were without merit.

On May 22, 1981, the court entered an order modifying the judgment of February 23, 1981. The modification consisted of the deletion of the award to the Bovinetts of the judgment against the Rollbergs for $510 per month for the withholding of possession of the premises. No findings were made in the order of modification. We presume that deletion of the judgment for rent for the withholding of possession was the only means whereby the transaction could yield sufficient funds to complete the payment of the Neuner contract.

There is apparently still pending in the trial court a petition for wrongful issuance of injunction filed by the Neuners subsequent to the February 23, 1981, judgment. We find no order in the record which disposes of the petition and it is not addressed by the parties in the appeal.

The Bovinetts appeal from that portion of the judgment of February 23, 1981, as modified by court order of May 22, 1981, which fails to award them liquidated damages for the wrongful withholding of possession. The Neuners appeal from that portion of the judgment of February 23, 1981, which grants a stay of 60 days pursuant to section 13 of the Forcible Entry and Detainer Act (Ill. Rev. Stat. 1979, ch. 57, par. 13), and requires them to specifically perform the contract for deed with the Rollbergs upon receipt of payment as provided in the judgment. The Rollbergs do not appeal, and we are advised in the parties’ briefs that the Rollbergs delivered possession of the premises to the Bovinetts sometime subsequent to the February 23, 1981, judgment.

The fact that this case is concerned with two separate agreements for deed to the same real estate has brought considerable complication. The many pleadings that have been filed have been described in detail to assist in sorting out the claims, crossclaims and defenses which the three parties involved have made as to each other. On the occasion of the prior appeal the sole concern had been the validity of the contract between the Rollbergs and the Bovinetts. The trial court had found a valid contract and granted specific performance upon it. Upon remand and repleading, the Rollbergs and Bovinetts seemingly continued to be primarily concerned with their transaction with each other and more or less took for granted the continued vitality of the contract for deed between the Neuners and the Rollbergs. But the complexion of the case has changed for the instant appeal. After the trial court found for a second time that the Rollbergs had entered into a valid contract with the Bovinetts, the Rollbergs acknowledged the point and did not appeal. The sole issue in the appeal involving the contract between the Rollbergs and Bovinetts concerns the court’s allowance, and later disallowance, of the Bovinetts’ claim for liquidated damages specified in their contract for the withholding of possession. The Neuners, on the other hand, vigorously press their claim that their contract with the Rollbergs has long been forfeited and that the court erred in granting the Rollbergs 60 days to reinstate the contract by paying the balance due, plus interest, pursuant to section 13 of the Forcible Entry and Detainer Act. The Neuners further contend that the court erred in fixing the rate of interest to be paid them at 5%. We agree with the arguments of the Neuners.

There can be no question that the contract for deed entered into on June 28, 1974, between the Neuners and the Rollbergs is in default because of the Rollbergs’ failure to make the payments as provided. That default occurred when the Rollbergs failed to make the balloon payment of $28,112.47 on July 1, 1977. The contract expressly provided that nonpayment of the stated price when due would result in forfeiture. The trial court in its order of February 23, 1981, made an express finding that a default had occurred. Although the trial court did not use the term “forfeiture” in its judgment of February 13, 1981, when it granted the Neuners judgment for possession of the premises, forfeiture by the Rollbergs of all rights under the contract was an implicit term. We affirm the decision of the trial court that the Neuners were entitled to a judgment for possession. Eade v. Brownlee (1963), 29 Ill. 2d 214, 193 N.E.2d 786; Kingsley v. Roeder (1954), 2 Ill. 2d 131, 117 N.E.2d 82; Aden v. Alwardt (1979), 76 Ill. App. 3d 54, 394 N.E.2d 716.

The Rollbergs and the Bovinetts readily concede that the Rollbergs are in default on the Neuners’ contract but they argue that by reason of the doctrine of equitable conversion the court improperly declared a forfeiture. Under the doctrine of equitable conversion, upon the execution of a valid, enforceable contract for the sale of real estate, the purchaser becomes owner of the real estate, holding the purchase money as trustee for the seller. The seller becomes trustee of the legal title for the purchaser with a lien on the land as security for the purchase money. Eade v. Brownlee; Shay v. Penrose (1962), 25 Ill. 2d 447, 185 N.E.2d 218.

While the doctrine of equitable conversion would operate to create the roles as described, it will not survive the intervention of other equitable considerations, notably the failure of the parties to fulfill the terms of the contract involved. Such is the case here. “Courts of equity abhor forfeitures, but where a forfeiture has been declared in the manner prescribed by the parties to a contract the court will give effect to the contract.” (Eade v. Brownlee (1963), 29 Ill. 2d 214, 219, 193 N.E.2d 786, 789.) Nonpayment of the great bulk of the purchase price for a protracted time would alone support the finding of the trial court that a forfeiture had occurred. Hartman v. Hartman (1973), 11 Ill. App. 3d 524, 297 N.E.2d 199; 666 North Orleans, Inc. v. Kors (1973), 11 Ill. App. 3d 676, 297 N.E.2d 372.

After finding that the Neuners were entitled to possession of the premises and entering judgment therefor, the trial court granted relief to the Rollbergs pursuant to the provisions of section 13 of the Forcible Entry and Detainer Act, permitting reinstatement of the forfeited contract by the payment of the principal due, plus interest. The court justified its relief to the Rollbergs upon “equitable considerations” which were based upon findings that the Rollbergs were in possession and in compliance with the terms of the contract until the balloon payment became due on July 1, 1977, and had attempted to borrow the money to make the balloon payment but were declined loans on the premises because of “these proceedings.” In addition, the Rollbergs had offered to continue making monthly payments in lieu of the balloon payment, and the Bovinetts had offered to purchase the Neuners’ interest, which offers were declined by the Neuners. Further, the Rollbergs had made improvements to the property.

It has been noted by our courts that the legislative purpose in enacting section 13 of the Forcible Entry and Detainer Act was to permit a contract purchaser of real estate to cure a default before permitting the seller to take possession of the real estate, avoid a loss of money previously paid and avoid a forfeiture of all rights under his contract. Mallin v. Najarian (1979), 76 Ill. App. 3d 441, 395 N.E.2d 172.

Section 13 of the Forcible Entry and Detainer Act provides in part:

“If it appears on the trial that the plaintiff is entitled to the possession of the whole of the premises claimed, he shall have judgment for the possession thereof and for his costs. However, if the action is based upon a breach of a contract entered into on or after July 1, 1962 for the purchase of such premises, the court, by order, may stay the enforcement of the judgment for a period not to exceed 60 days from the date of the judgment, or if the court finds that the amount unpaid on said contract is less than 75% of the original purchase price, then the court shall stay the enforcement of the judgment for a period of 180 days from the date of the judgment.” (Emphasis added.) (Ill. Rev. Stat. 1979, ch. 57, par. 13.)

Speaking of section 13, the court in First National Bank & Trust Co. v. Nitka (1978), 60 Ill. App. 3d 977, 979, 377 N.E.2d 577, 579, had this to say:

“We agree with the plaintiffs that section 13 of the Act (Ill. Rev. Stat. 1975, ch. 57, par. 13) does not mandate the issuance of a stay in situations where the contract purchaser has yet to pay more than 75 percent of the original contract purchase price. We believe that the juxtaposition of the words ‘may’ and ‘shall’ in this section makes it clear that the legislature intended the word ‘may’ to mean that the matter was within the sound discretion of the trial court, while the word ‘shall’ requires the trial court to issue a stay where the contract purchaser has yet to pay less than 75 percent of the original contract purchase price. Therefore, we hold that in situations such as is in the case at hand, where the contract purchaser still has more than 75 percent of the original contract price to pay, section 13 of the Act (Ill. Rev. Stat. 1975, ch. 57, par. 13) does not mandate the issuance of a stay, but instead leaves the matter up to the trial court’s sound discretion.”

We agree with this analysis and apply it in our disposition of the issue of the forfeiture of the Neuner-Rollberg contract.

The trial court correctly found that it possessed discretion to determine whether to invoke the provisions of section 13 and give the Rollbergs 60 days in which to cure their forfeiture. Acting upon what it perceived to be controlling considerations, the trial court granted the 60-day stay. We believe the trial court erred in taking this action and that in doing so it abused its discretion. When all the relevant factors in the case between the Rollbergs and the Neuners are considered, they must be found to weigh heavily in favor of the position of the Neuners and require that the Neuners be afforded their contractual right to declare a forfeiture of their contract and to have judgment for possession without the imposition of the 60-day stay for reinstatement pursuant to section 13. Any equities rightfully possessed by the Bovinetts would be improperly considered in determining the rights of the Neuners. The Bovinetts were, after all, subsequent contractors, not assignees of the Neuners’ contract.

As mentioned in the detailing of the pleadings, the Neuners were never alleged to be guilty of any fault, neglect- or defalcation. Their only act in the entire process was to sign a contract for deed with the Rollbergs in 1974. They were entitled to have the Rollbergs comply with the terms of the contract. The most that can be said against the Neuners is that after their contract was already in default they declined to accept continuing monthly payments in lieu of the agreed-upon balloon payment of $28,112.47. The monthly payments were $225 and included interest on the principal balance. With a 10% down-payment on the contract of $3,432, $30,888 remained to be paid. After 36 months of $225 payments, the principal amount due had been reduced only $2,775.53. The Neuners cannot be criticized, much less penalized, for their refusal to agree to a continuation of the monthly payments. This is especially true when it is considered that they were in no way responsible for the Rollbergs’ inability to obtain the mortgage loan to make the balloon payment; that was the result of the Rollbergs’ decision to litigate with the Bovinetts over the subsequent alleged contract. In addition, at the time of the default, the Neuners would have been able to invest the proceeds of the contract payment at a much larger interest rate than the 6% called for in the contract.

Both the Rollbergs and Bovinetts argue that the Neuners have no cause for complaint from the terms of the February 23, 1981, judgment because they would receive all that their contract with the Rollbergs entitled them to. To the contrary, we think it is obvious that the judgment did not give the Neuners that which they had contracted to receive. It would be erroneous to speak of the manner in which performance of the Neuners’ contract was made, for there was no performance. The performance as tendered by the Rollbergs and the Bovinetts and as directed by the judgment was deficient in several respects. The deficiencies extended to the time of performance agreed upon and the amounts of money agreed upon, as well as to other terms of the contract. It cannot be said that the deficiencies were of a minor or technical nature. Rather, we view them as substantial and as concerning the major provisions of the contract.

The Neuners’ contract first went into default on July 1, 1977, when the Rollbergs failed to make the balloon payment. From that time the Neuners have been deprived of the use of the money represented by that payment. The long delay involved, now over five years, was the result of litigation for which the Neuners were in no way responsible and over which they had no control. At the onset of that litigation in 1977 the Neuners were enjoined by court order from taking any steps to declare a forfeiture of the contract with the Rollbergs or from seeking to regain possession. That injunction was issued against them despite the fact that no allegations of wrongdoing were made against them and no relief was asked of them. Their contract rights were simply “put on hold” while other litigation with which they had no concern ran, and is still running, its course. It is a matter of common knowledge that both interest rates and property values have sharply escalated since the 1974 signing of the contract and since the 1977 default upon the contract. Under the circumstances, the Neuners were as much entitled as the Rollbergs or the Bovinetts to profit by the great increase in the value of the property that had occurred since the contract had been signed. The Rollbergs also failed to pay the real estate taxes assessed upon the property for the years 1977 and 1978, and the Neuners were forced to make redemption from the ensuing sale for nonpayment.

No equity arises in favor of the Rollbergs because of the repairs and improvements they made upon the property. The contract provided that they would keep all improvements in a good state of repair at their own expense. Additionally, the Rollbergs had possession of the premises for over four years without the payment of rent. If the payments they made were to be considered as rent, it would amount to approximately $155 per month, by Mr. Rollberg’s own admission, a fair rental value of the property would have been $300 to $400 per month. In addition, the Rollberg-Neuner contract fixed a monthly penalty of $510 for the withholding of possession. The improvements made by the Rollbergs would be inadequate compensation for the Rollbergs’ time of possession and in that respect they received a bargain.

The Bovinetts argue that they are innocent of any wrongdoing, a position with which we agree. But it must also be said that the Neuners are innocent of any wrongdoing and the Bovinetts can state no equities against them.

In sum, the Neuners have suffered too long an unjustified delay in the fulfillment of their contract rights, and there were too many serious breaches of the terms of their contract to permit a discretionary decision to invoke the provisions of section 13 of the Forcible Entry and Detainer Act and allow 60 days in which to reinstate and complete the Neuners’ contract.

Although it has no bearing on our decision, we find error in the trial court’s award of interest to the Neuners from the July 1, 1977, date of default at the statutory rate of 5%. The rate of interest stated in the contract for deed was 6% per annum on the balance due. There is no justification for substituting the statutory rate provided by section 2 of the Interest Act (Ill. Rev. Stat. 1979, ch. 74, par. 2) for the interest rate agreed upon by the parties. The statute is applicable only in the absence of an agreed-to lawful rate of interest. The contract rate must pertain until such time as the contract is paid out or a judgment is rendered. Cf. Ill. Rev. Stat. 1979, ch. 74, par. 4.

Because of the result we have reached, we do not address the issue raised by the Bovinetts in their appeal of that portion of the judgment which denied their claim for liquidated damages by reason of the wrongful withholding of possession.

That part of the judgment of the trial court which awards possession of the premises to the Neuners’ successors is affirmed; that part of the judgment of the trial court which stays enforcement of the judgment for possession for 60 days and otherwise directs the Neuners’ successors to deliver to the escrow agent a deed conveying the property to the Rollbergs is reversed. Other portions of the judgment of February 23, 1981, which related to the appointment of an escrow agent, directed the execution and delivery of deeds, the payment and distribution of money, and the like, were not appealed and are not addressed. We observe, however, that the result we reach renders moot those portions of that judgment that grants relief other than that afforded by this opinion.

Affirmed in part and reversed in part.

KASSERMAN and WELCH, JJ., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE EARNS

license: Public Domain

text:
      In re ESTATE OF COLBA GHER FENTON, Deceased.-(Robert Vernon Beaver et al., Respondents-Appellants, v. Franklin E. Fenton et al., Petitioners-Appellees.)
    Fifth District
    No. 81—475
    Opinion filed August 23, 1982.
    Rehearing denied September 17, 1982.

      J. Phil Gilbert, of Gilbert & Gilbert, of Carbondale, and James L. Karraker, of Anna, for appellants.
    William L. Broom III, of Barrett, Morris & Broom, of Carbondale, for appellee Franklin E. Fenton.
   PRESIDING JUSTICE EARNS

delivered the opinion of the court:

Petitioner, Franklin E. Fenton, executor of the estate of Colba Gher Fenton, deceased, brought this action in the circuit court of Jackson County seeking a construction by the court of a provision of the will bequeathing the decedent’s securities to named nieces and nephews. By its judgment, the trial court found, in part, in favor of the construction sought by the legatees under the provision of the will and, in part, in favor of the construction sought by two of decedent’s heirs not named in the will. Robert Vernon Beaver and Shirley Earraker, heirs of decedent, appeal.

The following issues are raised on appeal: whether the trial court erred in construing the term “securities” as intended by decedent to pass certificates of deposit and whether the doctrine of equitable apportionment should be applied between the testate and intestate assets of decedent in the payment of the expenses of administration and taxes.

Decedent died on November 18, 1980, at the age of 76 years. Her will, which was executed on November 1, 1978, was prepared by a law student in conjunction with a senior citizen’s project on estate planning. The will contained 11 sections. In sections 3, 4, 5 and 8, decedent’s household furniture was bequeathed. Her house was devised in section 7. Section 9 of the will provided for the disposition of the balance due on two contracts for the sale of real estate. Section 6 of the will provided the following:

“I hereby give and bequeath my securities to my nieces and nephews, Tilbert F. Henderson, Genevieve Lowry, Hazel Red-cloud, Ray Lee Beaver, Robert E. Beaver, Ralph Beaver, Joy Harris, Darlene McNeil, and Judy Hall, or to the survivors of them, equally, per capita.”

The will did not contain a residuary clause.

Sections 1 and 2 of the will contained directions to the executor regarding the decedent’s burial and the payment of debts and expenses of administration. Section 10 contained the requirement that a legatee survive decedent by four months in order to take under the will. Section 11 named the executor, enumerated his powers and provided that all taxes

“Shall be paid and discharged by my Executor as part of the expenses of the administration of my estate, so that the legatees, beneficiaries or devisees herein shall receive their respective legacies, bequests or devises without deduction of, or liability for, any such taxes, duties or charges.”

At the time of her death, the decedent’s estate was valued at about $175,000 and consisted primarily of savings accounts, checking accounts and certificates of deposit held at several financial institutions located in Carbondale, Illinois, which in sum totaled about $119,000. Also included in the estate were United States Government Series “E” bonds valued at about $26,200. Decedent’s home and its furnishings were valued at about $23,400. The balance due on the contract for the sale of real property was valued at about $5,800. Finally, two life insurance policies payable to the estate were valued at about $500. .

Two separate hearings on the petition were conducted by the trial court. The first hearing resulted in a finding by the court that section 6 of the will was ambiguous. The evidence at the second hearing shows that the decedent purchased all of the United States Government Series “E” bonds and the majority of the certificates of deposit prior to the date of the execution of her will. The decedent did not own any common stock or corporate bonds at the time her will was executed or at her death.

The trial court held that the United States Government Series “E” bonds and the certificates of deposit owned by decedent at the time of her death passed as “securities” under section 6 of the will. The trial court ordered that the debts and expenses of administration, including taxes, be paid from the proceeds of the life insurance policies, the checking accounts and the savings accounts. The trial court also ordered that any residue from the property allocated to the payment of the expenses pass as intestate property.

Beaver and Karraker first contend that the trial court erred in finding that the certificates of deposit owned by the testatrix at the date of her death passed under section 6 of the will as “securities.” More specifically, they argue that the common usage of the term “securities” means corporate stocks, bonds, treasury notes and other negotiable instruments. Further, it is asserted that because the certificates of deposit were designated as non-negotiable, they must pass as intestate property rather than under the will.

The issue raised here as to what property passes under the term “securities” as employed in a will has not been considered by the courts of our State. This issue, however, has been discussed in other jurisdictions. (See generally Annot., 27 A.L.R. 3d 1386 (1969); 79 C.J.S. “Security”; “Securities” (1952).) Reviewing the annotation and cases cited therein, the term “securities” has been construed to encompass evidence of a debt or property or an instrument entitling the holder to demand property held by another. Corporate bonds, shares of stock and certificates of deposit are all within this definition. We do not find any support for appellants’ assertion that the term “securities” is commonly defined as negotiable instruments. If appellants intend by their use of the term negotiable instruments to refer to that term as defined in the Uniform Commercial Code — Commercial Paper (Ill. Rev. Stat. 1979, ch. 26, par. 3 — 104) then clearly certificates of deposit are included within this definition. If appellants mean to refer to negotiable instruments in the general sense of investments in the financial sector of the economy, then certificates of deposit are encompassed within this definition as well. We conclude that the better definition of the term “securities” encompasses evidence of a debt or property.

It is well-established that the primary objective in construing a will is to ascertain and give effect to the intent of the testator, unless it is contrary to law or public policy (Rosenthal v. First National Bank (1968), 40 Ill. 2d 266, 239 N.E.2d 826.) Where the will is ambiguous, extrinsic evidence may be considered by the court in determining the testator’s intent at the time of the execution of the will. (Weir v. Leafgreen (1962), 26 Ill. 2d 406, 186 N.E.2d 293; Wielert v. Larson (1980), 84 Ill. App. 3d 151, 404 N.E.2d 1111.) Here, appellants concede that the testator’s intention by the use of the term “securities” cannot be ascertained from its context alone. Therefore, it is necessary to examine the surrounding circumstances.

The record supports the finding of the trial court that the testatrix did not own any shares of stock or corporate bonds at the time of the execution of her will. Appellants’ assertion that more probative evidence could have been adduced at the hearing is without merit. The executor of the estate, the testatrix’ stepson, testified that he could not find any evidence that the testatrix owned corporate stocks or bonds at that time. At the time of her death, the testatrix’ estate consisted primarily of certificates of deposit. In addition, the record shows a pattern of investment by the testatrix in certificates of deposit. We conclude that the trial court correctly ruled that the testatrix intended by the term “securities” in section 6 of the will to pass the certificates of deposit owned by her at her death.

Beaver and Karraker next contend that because the testatrix’ will did not indicate the source of payment of the expenses of administration and estate taxes, these charges should be equitably apportioned between the testate and intestate assets of the estate, citing Roe v. Estate of Farrell (1978), 69 Ill. 2d 525, 372 N.E.2d 662, and In re Estate of Gowling (1979), 77 Ill. App. 3d 548, 396 N.E.2d 82.

Illinois law controls the allocation of the burden of Federal estate tax liability on estates administered in Illinois. (Riggs v. Del Drago (1942), 317 U.S. 95, 87 L. Ed. 106, 63 S. Ct. 109.) Our supreme court has adopted a rule of equitable apportionment of Federal estate taxes and administration expenses between the probate and nonprobate estates, in the absence of a contrary direction by the decedent. Roe; In re Estate of Gowling (1980), 82 Ill. 2d 15, 411 N.E.2d 266.

We recently discussed the applicability of the rule of equitable apportionment to the probate assets in In re Estate of Maddux (1981), 93 Ill. App. 3d 435, 417 N.E.2d 266. In Maddux, two residuary legatees appealed from the judgment of the trial court finding that the residuary estate should bear the burden of the estate taxes and fees without apportionment. On appeal, the residuary legatees asserted, among other things, that Illinois law now permitted Federal estate taxes to be apportioned so that every beneficiary bears a proportionate share of the taxes, relying on the cases cited by appellants here. We rejected this argument and affirmed the judgment of the trial court. We reasoned that where the will contained no direction as to manner of payment, Illinois law required that the payment of taxes and other fees first be made from the residuary estate. We also noted agreement with the fourth district’s reasoning in In re Estate of Gowling, which the supreme court did not modify or repudiate on appeal. In Gowling, the fourth district stated that there were two distinct rules to be applied in determining the allocation of the burden of estate taxes with respect to testate estates. As between probate assets, Illinois follows the burden on the residue rule. Where there are nonprobate assets that generate estate tax liability, however, equitable apportionment between the probate and nonprobate assets may be sought. We conclude, therefore, that the rule of equitable apportionment does not apply to the instant case because decedent’s estate consisted solely of probate assets, that is, assets passing by will or intestacy.

Assuming, arguendo, that the rule of equitable apportionment may be applied as between the probate assets of an estate, we conclude that apportionment is not appropriate in the instant case. As the supreme court recognized in Roe v. Estate of Farrell, equitable apportionment of estate taxes or fees does not apply where a contrary intent has been manifested by the testator in his will or by the legislature.

Section 11 of the will, which stated that the specific devisees and legatees receive their respective devises and bequests without the deduction of any taxes, provides such a contrary direction. In our opinion, section 11 of the will precludes equitable apportionment as it clearly expresses the intent of the testatrix that death taxes be paid only from that portion of the estate not the subject of a specific devise or bequest.

Finally, our supreme court has stated that under section 2 — 1 of the Probate Act of 1975 (Ill. Rev. Stat. 1979, ch. 110½, par. 2 — 1), which provides the rules of descent and distribution for intestate property, the legislature intended that the respective interests of the heirs at law be calculated from the net estate after the payment of all just claims. (In re Estate of Grant (1980), 83 Ill. 2d 379, 415 N.E.2d 416.) This interpretation precludes the application of the rule of equitable apportionment in the case at bar because it requires that claims against the estate, including estate taxes, be paid from the gross estate before the interests of the heirs are calculated.

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

Affirmed.

KASSERMAN and HARRISON, JJ., concur.


author: JUSTICE KASSERMAN JUSTICE HARRISON,

text:
    O. DUNAWAY et al., Plaintiffs-Appellees, v. THE DEPARTMENT OF LABOR, BUREAU OF EMPLOYMENT SECURITY, DIVISION OF UNEMPLOYMENT INSURANCE, et al., Defendants-Appellants.
    Fifth District
    No. 81—267
    Opinion filed August 25, 1982.
    Rehearing denied September 21, 1982.

      HARRISON, J., dissenting.
    Glen H. Kanwit, of Chicago, and Charles R. Jelliffe, of Jelliffe and Ferrell, of Harrisburg, for appellant Sahara Coal Company, Inc.
    Tyrone C. Fahner, Attorney General, of Springfield (Rosalyn B. Kaplan, Assistant Attorney General, of counsel), for appellant Department of Labor.
    J. E. Wenzel and Verticchio & Verticchio, both of Gillespie, and G. William Horsley, of Springfield, for appellees.
   JUSTICE KASSERMAN

delivered the opinion of the court:

The instant appeal arises out of the decision of the circuit court of Saline County in an administrative review proceeding. The general issue is whether the claimants, who are employees of defendant Sahara Coal Company (Sahara) and members of the Progressive Mine Workers of America (PMWA), are disqualified from receiving unemployment insurance benefits under section 604 of the Illinois Unemployment Insurance Act (Ill. Rev. Stat. 1979, ch. 48, par. 434) (hereinafter referred to as the Act). Claimants were denied benefits for a period of time during which they refused to cross United Mine Workers of America (UMWA) picket lines at Sahara’s strip mine, repair shop, and two underground mines.

Section 604 provides in pertinent part as follows:

“Labor dispute. An individual shall be ineligible for benefits for any week with respect to which it is found that his total or partial unemployment is due to a stoppage of work which exists because of a labor dispute at the factory, establishment, or other premises at which he is or was last employed. *** This Section shall not apply if it is shown that (A) the individual is not participating in or financing or directly interested in the labor dispute which caused the stoppage of work and (B) he does not belong to a grade or class of workers of which immediately before the commencement of the stoppage there were members employed at the premises at which the stoppage occurs, any of whom are participating in or financing or directly interested in the dispute; provided, that a lockout by the employer or an individual’s failure to cross a picket line at such factory, establishment, or other premises shall not, in itself, be deemed to be participation by him in the labor dispute.” Ill. Rev. Stat. 1979, ch. 48, par. 434.

Although Sahara employs no UMWA members, a total stoppage of production was effected from December 6, 1977, through March 6, 1978, except as hereinafter noted. An Illinois Department of Labor claims adjudicator determined that plaintiffs were eligible for benefits; however, upon Sahara’s appeal to the Labor Disputes Unit of the Division of Unemployment Insurance, the representative of the Illinois Director of Labor recommended that claimants be held ineligible under section 604. The representative of the Illinois Department of Labor based his recommendation upon his conclusion that the contract between PMWA and the Coal Producers’ Association of Illinois (CPAI), of which Sahara is a member, gave claimants a “direct financial interest” in the UMWA dispute regardless of the fact that UM-WAs dispute was with the Bituminous Coal Operators’ Association (BCOA), of which Sahara is not a member. The Director of Labor adopted the representative’s recommendation. Claimants sought administrative review in the circuit court of Saline County. No new evidence was adduced before that court; the circuit court reversed, determining that plaintiffs were not “directly interested’ in the UMWA-BCOA dispute. Sahara and the Department of Labor have perfected the instant appeal.

At the outset we note that section 604 of the Act makes an employee ineligible for benefits for any week in which it is found that his unemployment is due to a work stoppage which exists because of a “labor dispute at the *** premises at which he is or was last employed” unless the two specified exceptions are found to exist. Although it may be argued under this provision that claimants may not be deprived of benefits because no labor dispute existed at the premises where they worked, the parties have not relied upon such an interpretation of the Act. Consequently, we shall not consider such interpretation of the Act.

Testimony at the hearing before the Director’s representative was in pertinent part as follows: Walter Lucas, vice-president of Sahara, testified that UMWA members started picketing on December 6, 1977, at all four Sahara facilities. Lucas testified that he was aware of no acts of violence at any of Sahara’s four facilities during the UMWA strike although he had read newspaper accounts of strike-related threats and violence at other locations. Several such newspaper articles were admitted in evidence at the hearing. Lucas testified that when the picketing began, he instituted security procedures, including security patrols and surveillance and identification of pickets and their vehicles. According to Lucas, all four Sahara facilities were marked “to work,” as opposed to “idle,” throughout most of the period during which the facilities were picketed. However, the mines were marked idle between December 27, 1977, and January 2, 1978, which Lucas described as “our normal shut down period.” According to Lucas, under the PMWA-CPAI contract, qualifying PMWA members were paid during this shutdown period if they worked the day before it and the day afterward. Lucas testified that no pickets were present the day before or the day after the shutdown period and that an unspecified number of Sahara employees did in fact work on these two days. Lucas testified that picketing by the UMWA Construction local stopped work on March 26 and 27,1978.

Several PMWA members employed at Sahara also testified at the hearing. Their testimony indicated that most of them did not work on December 6, 1977, the first day of picketing. One employee mentioned seeing a picket swinging a “tire thumper,” the only testimony concerning what might be considered a weapon. Some employees stated that they were asked not to work. None testified to being threatened on December 6; however, one employee, who worked on December 8 because he had seen no pickets, came home to discover that his family has been threatened by telephone. Two other employees testified concerning similar threats. One Sahara employee testified that when he first returned to work in March, he was assigned to patrol the belt line because “the mine had received phone calls.” Several pickets were described as being intoxicated. There was testimony that the employees returned to work on the day following President Carter’s March 6, 1978, announcement that he was ordering the miners back to work under the Taft-Hartley Act. UMWA pickets were removed from the four Sahara facilities beginning March 7, 1978. A settlement between UMWA and BCOA ending the strike was reached March 27, 1978.

Included in the PMWA-CPAI contract in effect at the time of the UMWA strike was a “most favored nations” clause which provided:

“During the term of this contract should any competitive field make a contract covering wages or working conditions more favorable to either the Association or the Union ***, then this contract shall be modified so that both sides may receive all the benefits of such more favorable contract ***.”

Mr. Lucas testified that there was considerable difference between UMWA and PMWA wage scales under their respective contracts, the PMWA receiving the higher wages. He testified that in the two unions’ most recent contracts each had received the same pay increases; thus, PMWA members continued to be better paid than UMWA members.

The new PMWA-CPAI contract, entered into on April 6, 1978, included pay raises retroactive to March 27, the date of the new UMWA-BCOA contract. Eugene Hughes, PMWA district and international president, testified that these raises and their effective dates were negotiated and that PMWA “always” negotiated for raises retroactive to the date UMWA received raises. One Sahara employee testified that he received his first pay increase in his April 20, 1978, paycheck. Attorney Horsley, counsel for claimants, stated: “That would be correct, a ten day hold back.” Horsley also stated that these raises were negotiated during negotiations resulting in the April 6 contract. “There was nothing automatic about it.” During the hearing, the Director’s representative expressly invited the parties to supply more evidence tending to show whether the PMWA raises were negotiated or were received as of right.

The Director’s representative held that claimants were “directly interested” in the UMWA-BCOA dispute. In so concluding, the Director’s representative expressly rejected claimants’ contention that the pay raises provided for in the new PMWA-CPAI contract were negotiated. “[T]he claimants were entitled to the raise retroactively as a matter of right — and an enforceable right, at that. This then, was not a question of the employer’s largess or the union’s bargaining skills. It was, rather, an enforceable right ***.”

In considering the dispute under the Administrative Review Act, the circuit court determined that claimants were not “directly interested” in the dispute, in that “the words ‘directly interested’ were not meant to exclude those members of another union who had not given any approval or consent to the strike by action of its membership or any of its officers.”

Our standard of review is as follows: The findings and conclusions of the administrative agency on questions of fact shall be held to be “prima facie” true and correct. (Ill. Rev. Stat. 1979, ch. 110, par. 274.) We are not bound to give the same deference to an administrative agency’s construction of a statute that we give to its findings of fact. While we might affirm a factual conclusion as not against the manifest weight of the evidence although we would have reached the opposite conclusion, we cannot let stand a decision based upon an erroneous construction of a statute. (Nestle Co. v. Johnson (1979), 68 Ill. App. 3d 17, 20, 385 N.E.2d 793, 795.) We are not bound by the administrative agency’s characterization of a particular conclusion as one of fact. See Berry v. Blackard Construction Co. (1973), 13 Ill. App. 3d 768, 772, 300 N.E.2d 627, 630.

The Director’s representative’s “finding of fact” that claimants were "directly interested” in the dispute was actually a construction of section 604 of the Act; accordingly, we need not defer to that conclusion as we would to a finding of fact. Further, while the representative’s conclusion that claimants’ pay increases were not negotiated is not listed among the representative’s formal findings of fact, it is nonetheless a finding of fact made by him and we treat it accordingly.

Sahara argues on appeal that the circuit court erred in concluding that “direct interest” required some element of participation in the strike by claimants or their union. We agree with Sahara’s interpretation of that court’s remarks, as well as with Sahara’s contention that "direct interest” can lie without “participation.” A statute should be construed, if possible, so that no word, clause, or sentence is rendered meaningless or superfluous. (City of East Peoria v. Group Five Development Co. (1981), 87 Ill. 2d 42, 47, 429 N.E.2d 492, 494.) Section 604 requires that a claimant, to avoid ineligibility, establish both lack of “participation” and lack of “direct interest.” A claimant may establish lack of “participation” by showing that his failure to work is due to reasonable fear of violence. (See, e.g., Sangamo Electric Co. v. Donnelly (1962), 26 Ill. 2d 348, 357, 186 N.E.2d 230, 235; Shell Oil Co. v. Cummins (1955), 7 Ill. 2d 329, 338-39, 131 N.E.2d 64, 69.) However, we know of no cases in which fear of violence has been considered relevant with respect to “direct interest.” We believe a claimant could be totally unable to work due to fear of violence, yet “directly interested” in the dispute and hence ineligible from receiving benefits under section 604. Cf. Local No. 658, Boot & Shoe Workers Union v. Brown Shoe Co. (1949), 403 Ill. 484, 490, 87 N.E.2d 625, 629.

In the case at bar, Sahara and the Department of Labor do not argue that claimants “participated” in the UMWA-BCOA dispute. Instead, they contend that claimants were “directly interested” in that dispute because claimants acquired their pay increases as a matter of right under the “most favored nations” clause.

A mere expectancy without any legal right does not disqualify a claimant from receiving benefits under section 604. (General Motors Corp. v. Bowling (1981), 85 Ill. 2d 539, 543, 426 N.E.2d 1210, 1212.) A claimant’s legal right to benefits obtained by employees actually engaged in the labor dispute is sufficient to create a “direct interest” in that dispute. (Cf. Shell Oil Co. v. Cummins (1955), 7 Ill. 2d 329, 131 N.E.2d 64.) In Shell Oil Co. v. Cummins, members of two unions struck, securing a wage increase which by “policy” of the employer was extended to the nonstriking unions’ members as well. Such increases were held not to be a right of the nonstriking unions’ members; therefore, they were held not to be “directly interested” in that dispute. We conclude that the Director’s representative correctly identified the crucial issue as being whether claimants were entitled to their pay increases as a matter of right.

We must next inquire whether the representative’s finding that those increases were acquired as of right was contrary to the manifest weight of the evidence. (Davern v. Civil Service Com. (1970), 47 Ill. 2d 469, 471, 269 N.E.2d 713, 714, cert. denied (1971), 403 U.S. 918, 29 L. Ed. 2d 695, 91 S. Ct. 2229.) Sahara and the Department rely primarily upon the “most favored nations” clause as establishing that right; claimants do not ask this court to adopt a contrary construction of that clause. We note as well that claimants received their pay increase effective the same day UMWA members received their pay increase in the same amount. True, according to one claimant’s uncontradicted testimony, claimants did not receive their increase until April 20, 1978, i.e., during the new PMWA-CPAI contract; however, this does not establish conclusively, or presumptively, that that increase was not obtained as a matter of right. Assuming that claimants had the right to any increase prior to the negotiations resulting in the new contract, the union conceivably could have bargained that right away in exchange for other concessions; however, the fact that such right existed would not be affected by the possibility or the eventuality that it might be bargained away. In this regard, the existence of the right would benefit the party possessing it by strengthening its bargaining position.

Claimants emphasize various uncontradicted evidence as showing that they worked whenever they could and that fear of violence was the primary motivation for their failure to work. As we have noted, that evidence is relevant to “participation” rather than “direct interest.” It has no bearing on the question of whether claimants’ pay increase was acquired as a matter of right. Claimants also urge that any rights they received under the “most favored nations” clause were relatively insignificant because their contract was about to expire. We do not read section 604 as permitting a distinction based on the monetary amount of claimants’ interest. That a relatively small amount of salary may have been involved is not pertinent to the inquiry whether claimants were entitled to an increase in salary as a matter of right. Claimants also urge that they were paid more than UMWA members, under both the old and new contracts of the respective unions. However, according to Walter Lucas’ uncontradicted testimony, both unions received the same salary increase. Thus, both received the same “benefits” (quoting from the “most favored nations” clause). For the same reason, testimony that PMWA members and UMWA members did not enjoy the same fringe benefits is not significant to our inquiry because there was no evidence of any significant new fringe benefits obtained by UMWA members during the UMWA-BCOA dispute.

We also note PMWA president Hughes’ testimony that the pay increases were negotiated. We believe the Director’s representative was free to disregard that testimony in view of its conclusory nature and the contradictory evidence of record. For the same reason, Walter Lucas’ testimony that claimants were not “directly interested” in the UMWA-BCOA dispute is of no legal consequence; Lucas was an occurrence witness, and his opinion of the legal significance of the events he described does not bind the Director’s representative or the courts.

We conclude that the Director’s representative’s finding that claimants’ pay increase was achieved as a matter of right rather than by negotiation was based on evidence of record and that that determination was not contrary to the manifest weight of the evidence. The circuit court erred in reversing the Director of Labor’s determination that claimants were “directly interested” in the UMWA-BCOA dispute.

We feel compelled to comment further upon the evidence that claimants were prevented from working by fear of violence. It seems a harsh rule of law which denies unemployment insurance benefits to a claimant who chooses not to work rather than to risk his safety and that of his family. However, unemployment insurance is a creation of the legislature, which has seen fit to set three conditions to its availability, all of which a claimant must meet. Without question the legislature is empowered to make proof of lack of “participation” — or, more directly, reasonable fear of violence — sufficient to avoid ineligibility. This the legislature has not done. If section 604 should be changed, it is for the legislature to change it, not this court.

For the foregoing reasons, the judgment of the circuit court of Saline County holding claimants eligible for unemployment insurance benefits under section 604 of the Act for the period of time in question is reversed.

Reversed.

JONES, J., concurs.

JUSTICE HARRISON,

dissenting:

I respectfully dissent.

Our supreme court, in Outboard, Marine & Manufacturing Co. v. Gordon (1949), 403 Ill. 523, 87 N.E.2d 610, determined the legislative intent underlying section 604 of the Unemployment Compensation Act and established the guidelines to determine ineligibility thereunder when it stated:

“The conclusion is unescapable that the legislature intended to provide for the innocent victims of a labor dispute by specifically excluding them from the denial of unemployment compensation. The previously quoted subsection *** was meant to protect and except such victims from the classes denied compensation by its terms. Those who were to be excluded from benefits by the statute were those who attempted to gain by conduct which caused their unemployment or those who actively aided or abetted the previous group, whether or not they gained or lost. A proximity of conduct aiding or abetting the strikers or proximity of result to be gained from the dispute were meant to be the measuring factors. The legislature did not intend to bar, because of remote claims of causation or result, those who were deprived of their employment from the benefits to be received under the act.” (Emphasis added.) Outboard, Marine & Manufacturing Co. v. Gordon (1949), 403 Ill. 523, 536-37.

Applying the “proximity of result to be gained from the dispute” as a measuring factor to the facts in the case sub judice, I feel the trial court’s decision that the plaintiffs did not have a “direct interest” in the labor dispute of the United Mine Workers of America against the Bituminous Coal Operators Association was correct.

First, the plaintiffs’ position that they had no direct interest in the United Mine Workers of America labor dispute is substantiated by the fact that Progressive Mine Workers of America members were already receiving more pay than the members of the United Mine Workers of America at the time of the commencement of the strike. As of November 12, 1977, a $2 a day increase for each employee of Sahara Coal Company went into effect. This increase had been negotiated and provided for in the contract, commencing April 10,1975.

Second, the brief period of time remaining on the term of the collective bargaining agreement between Progressive Mine Workers of America and the Coal Producers Association of Illinois also limits the proximity of the result to be gained by plaintiffs as a consequence of the labor dispute. The work stoppage commenced in December of 1977 and the contract of the Progressive Mine Workers of America, including plaintiffs herein, was due to expire on April 9, 1978. This four-month period of time would limit the results to be gained by plaintiffs as a result of the United Mine Workers of America labor dispute in that if a more favorable or less favorable contract concerning wages or working conditions was received by the United Mine Workers of America, there would hardly be time to modify the existing agreement between the Progressive Mine Workers of America and the Coal Producers Association of Illinois prior to the expiration of the existing collective bargaining agreement.

Third, it is important to note that plaintiffs, as members of the Progressive Mine Workers of America, returned to work at the Sahara facilities, not at the termination of the strike of the United Mine Workers of America against the Bituminous Coal Operators Association, but on March 7, 1978, at the time that President Carter issued a Taft-Hartley injunction. The strike of the United Mine Workers of America was not settled until March 27, 1978. Plaintiffs’ return to work on March 7, 1978, is a further fact demonstrating that they had no interest in the results of the strike and labor dispute of the United Mine Workers of America, particularly in light of the fact that the contract of the Progressive Mine Workers of America with the Coal Producers Association of Illinois was due to expire on April 9, 1978.

Further, as was stated in plaintiffs’ brief and reflected in the record, Walter Lucas, vice-president of Sahara Coal Company, testified that plaintiffs were not financing or directly interested in the work stoppage of the United Mine Workers of America and were not involved in a labor dispute with Sahara. Thus, plaintiffs were not “directly interested in the labor dispute which caused the stoppage of work.” They failed to cross the picket line only because they were intimidated by threats of violence. This was testified to by the plaintiffs and is seemingly acknowledged by the majority in its opinion.

Finally, it appears to me that there was not a “labor dispute at the *** establishment or other premises at which he or she was last employed,” as required by section 604. The majority stated that it would not consider this argument because the parties did not rely on this point on appeal. However, the plaintiffs stated in their brief:

“Lucas admitted that none of the people listed in the PMW Contract with Sahara were financing or directly interested in the work stoppage of the United Mine Workers and that there was no dispute between those people and Sahara at that time. (Volume 2, p.31.) As far as Lucas knew, there was no labor dispute with the Company at that time.

Thus, I think the point has been sufficiently raised. Also, a reviewing court may affirm a judgment of a trial court for reasons other than those advanced by the trial court. Well v. Schoeneweis (1981), 101 Ill. App. 3d 254, 258, 427 N.E.2d 1343.

There was clearly no dispute of any kind between plaintiff employees and Sahara. On the contrary, the labor dispute was between other companies and workers at other premises. Section 604 bases ineligibility on three factors: the presence of (1) a work stoppage, (2) a labor dispute, and (3) proximate causation between the work stoppage and the labor dispute at the claimant’s factory, establishment or place of employment. The presence of a labor dispute at other premises is of no legal significance. See Central Foundry Division v. Holland (1976), 36 Ill. App. 3d 998, 345 N.E.2d 143.

Therefore, I feel the trial judge was correct in reversing the decision of Director of Labor and finding plaintiffs were eligible for unemployment insurance. I would affirm the judgment of the circuit court of Saline County.

       This is particularly significant as Section 604 of the Unemployment Compensation Act (Ch. 48, §434, Ill. Rev. Stat.) bases ineligibility for benefits on three factors including that proximate causation must be found between the work stoppage and the labor dispute at Claimant’s factory, establishment, or other premises.”


author: JUSTICE KASSERMAN

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. RITA C. HEFLEY, Defendant-Appellant.
    Fifth District
    No. 81—132
    Opinion filed August 12, 1982.

      Michael B. White, of Hillsboro, for appellant.
    Kelly Long, Special Prosecutor, of Hillsboro (Martin N. Ashley and Frank J. Bieszczat, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE KASSERMAN

delivered the opinion of the court:

The defendant was found guilty by a jury in Montgomery County of cruelty to children and aggravated battery stemming from several incidents occurring between June 1, 1980 and June 13, 1980. The defendant was sentenced to imprisonment for a term of two years for the aggravated battery conviction and one year for the cruelty to children conviction, the sentences to run concurrently. From the convictions and sentences, defendant appeals.

The extensive testimony taken at trial reveals that defendant was living with a man named Jowell Miller, Sr. In March of 1980, Jowell Lynn Miller, Jr., age 5, came from Ohio to live with Mr. Miller, Sr., and the defendant and her three children. On or about June 1, 1980, Joe Jr. accidently cut his foot on a lawnmower at defendant’s father’s house. In attempting to treat the boy’s injury the defendant forced his feet into steaming water, causing second and third degree burns from the ankle down.

Acting on a complaint from a neighbor on June 13, 1980, Mrs. Deborah Donham of the Department of Children and Family Services and Officer James Bailey of the Raymond, Illinois, police force came to the defendant’s residence. Mrs. Donham and Officer Bailey observed the condition of the child and took him to St. Frances Hospital in Litchfield, Illinois, and later transferred him to Memorial Medical Center in Springfield.

Officer Bailey testified that he observed bruises about the face and head of Joe Jr. and that the boy’s feet were bloody and covered with a white chalky substance.

Expert testimony revealed that Joe Jr. had sustained second and third degree burns from his ankle down and bruises on his neck, back, and face. The burns were described as the immersion type rather than splash burns, requiring a skin graft operation on Joe Jr.’s right foot.

On appeal, defendant first contends that photographs of Joe Jr.’s injuries were improperly admitted into evidence. She claims that they were of little or no probative value in the trial and served only to inflame and prejudice the jury. We cannot agree.

It is well settled in Illinois that the admission into evidence of photographs of a crime victim is within the sound discretion of the trial court and, when the photographs are relevant to establish some material fact, they are admissible despite their gruesome nature. (People v. Garlick (1977), 46 Ill. App. 3d 216, 224, 360 N.E.2d 1121, 1127.) Further, the admission of such photographs is not unnecessarily cumulative simply because there is also oral testimony describing the injuries. People v. West (1977), 54 Ill. App. 3d 903, 909, 370 N.E.2d 265, 270.

Here the photographs were examined in chambers and the examination was made part of the record. The trial court was cautious in guarding against any prejudice when admitting some photographs and excluding others. Those photographs admitted were done so to assist the jury in understanding the medical testimony of the victim’s injuries.

Furthermore, it must be pointed out that defendant here has failed to provide the photographs of Joe Jr.’s injuries for this court to review. This court must presume that the photographs were properly admitted since any doubts arising from an incomplete record must be resolved against the appellant, whose responsibility it is to provide a complete record for review. People v. Wilson (1981), 92 Ill. App. 3d 370, 386, 415 N.E.2d 1315, 1327-28.

Defendant next urges that she was not proved guilty beyond a reasonable doubt and that the State failed to show that Joe Jr.’s injuries were inflicted intentionally. Numerous witnesses testified to the bruised and burned condition of Joe Jr., and the defendant admitted to striking Joe Jr. tin more than one occasion. Based on our review of this record, we conclude that the verdict of guilty was supported by the evidence and that the decision of the jury that the injuries were intentionally inflicted was not contrary to the manifest weight of the evidence. It is not within our province to override the trier of fact, who is in a better position to observe the credibility of the witnesses. City of Macomb v. Gould (1969), 104 Ill. App. 2d 361, 364, 244 N.E.2d 634, 636.

Defendant contends that she is incapable of being convicted of cruelty to children for two reasons: (1) because Joe Jr. was not within her legal control as defined by the statute, and (2) the crime of cruelty to children is a lesser included offense of aggravated battery, of which she was also convicted.

The phrase “legal control” has been defined as the lawful right to control. (People v. Parris (1971), 130 Ill. App. 2d 933, 267 N.E.2d 39.) Defendant argues that she had no legal control over the victim because she was only the live-in girlfriend of the victim’s father, and that no cases extend the language of the statute to persons such as her. We disagree.

The statute under which defendant was convicted provides as follows:

“Any person who shall wilfully and unnecessarily expose to the inclemency of the weather, or shall in any other manner injure in health or limb, any child, apprentice or other person under his legal control, shall be guilty of a Class 4 felony.” (Ill. Rev. Stat. 1979, ch. 23, par. 2368.)

Defendant here was in a position of in loco parentis to Joe Jr. She was in a position which required her to provide primary care for him as well as for her own three children. Joe Jr. lived with defendant under the same roof, shared meals together with other members of the household, and relied on the same source of support. The defendant admitted to attempts to educate Joe Jr. and also to attempts to discipline him. Regardless of the relationship between the defendant and Joe Sr., the defendant was in a position of legal control over the victim within the meaning of the statute. Cf. People v. Parris (1971), 130 Ill. App. 2d 933, 937, 267 N.E.2d 39, 42.

We further conclude that defendant was properly convicted of both aggravated battery and cruelty to children. Here the record shows that there was more than one act over a period of time which gave rise to the victim’s injuries, shown to have resulted from striking Joe Jr. and also burning him. Prejudice results to defendant, requiring vacation of a conviction, only in those instances where more than one offense is carved from the same physical act or “when the defendant is convicted of more than one offense, some of which are, by definition, lesser included offenses.” (People v. King (1977), 66 Ill. 2d 551, 556, 363 N.E. 2d 838, cert. denied (1977), 434 U.S. 894, 54 L. Ed. 2d 181, 98 S. Ct. 273.) “ ‘ “For an offense to be a lesser offense, and included within another, greater offense, it is necessary that the greater offense include every element of the lesser offense plus one or more other elements.” ’ ” (People v. Stoehr (1980), 82 Ill. App. 3d 827, 831, 403 N.E.2d 291, 293.) Hence, a lesser included offense is one composed of some, but not all of the elements of the greater offense, and which does not have any elements not included in the greater offense, so that it is impossible to commit the greater offense without necessarily committing the lesser offense. 82 Ill. App. 3d 827, 831, 403 N.E.2d 291, 293.

If we were to accept the premise that cruelty to children is a lesser included offense of aggravated battery as the defendant contends, we would, in effect, be saying that everyone who commits aggravated battery is also guilty of cruelty to children. This is not the case because certain elements necessary to establish cruelty to children, such as the age of the victim and that the victim is within defendant’s legal control, are not required to be proved to establish that a defendant is guilty of aggravated battery. (Cf. People v. Herr (1980), 87 Ill. App. 3d 819, 822-23, 409 N.E.2d 442, 446.) We conclude, therefore, that cruelty to children is not a lesser included offense of aggravated battery and that defendant’s conviction on both offenses must be affirmed.

Finally, the defendant submits that her motion for probation should have been granted and that her sentence was excessive in light of her background. “[I]t is not the function of a reviewing court to reweigh the evidence and substitute its judgment for that of the trial judge on the merits of the question of probation, but rather to determine whether the trial court failed to exercise discretion or acted in an arbitrary manner in denying probation.” People v. Rege (1976), 64 Ill. 2d 473, 482, 356 N.E.2d 537, 542.

Here the trial court conducted a sentencing hearing and took into account all factors required in imposing a proper sentence. (People v. West (1977), 54 Ill. App. 3d 903, 909-10, 370 N.E.2d 267, 270.) Therefore, we conclude that the sentence imposed by the trial court in the case at bar was proper under the rationale of People v. Perruquet (1977), 68 Ill. 2d 149, 368 N.E.2d 882, and People v. Cox (1980), 82 Ill. 2d 268, 412 N.E.2d 541.

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

Affirmed.

EARNS, R J., and JONES, J., concur.