author: JUSTICE LORENZ MEJDA, J., concurring. PRESIDING JUSTICE SULLIVAN,

text:
    JOSIE STARKEY, Plaintiff-Appellant, v. ILLINOIS CIVIL SERVICE COMMISSION et al., Defendants-Appellees.
    First District (5th Division)
    No. 80-2351
    Opinion filed April 16, 1982.

      SULLIVAN, P. J., dissenting.
    Gerald A. Goldman, of Gerald A. Goldman, Chartered, of Chicago (Benjamin P. Hyink, of counsel), for appellant.
    Tyrone C. Fahner, Attorney General, of Chicago (Karen Konieczny, Assistant Attorney General, of counsel), for appellees.
   JUSTICE LORENZ

delivered the opinion of the court:

Plaintiff Josie Starkey appeals from a circuit court order which affirmed an Illinois Civil Service Commission decision to discharge her from employment with the State. (Ill. Rev. Stat. 1979, ch. 127, par.' 63b111a.) We reverse because the Commission’s decision is against the manifest weight of the evidence. The following facts are material to our decision.

Starkey was employed as the claims manager of the Waukegan branch of the Illinois Department of Labor, Bureau of Employment Security (BES). In July of 1979 she was notified that she was being discharged based on the allegation that she processed a claim for unemployment benefits on behalf of her mother, Lillian McCoy, with knowledge that McCoy’s claim was fraudulent. Starkey requested a hearing on the charges, and the Civil Service Commission appointed a hearing officer. (Ill. Rev. Stat. 1979, ch. 127, par. 63blll.) The evidence presented to the hearing officer shows that Lillian McCoy went to the Waukegan BES office on September 10,1976, to apply for unemployment benefits under the Supplemental Unemployment Assistance (SUA) program. Starkey testified that, although it was not a regular part of her duties, she partially filled out a claims application for her mother and put this form in the pile of SUA applications. She told her mother to wait for a claims taker to call her so that the application could be completed and her eligibility evaluated. Without this shortcut, her mother would have had to wait in one line only to be told that she had to go to a line for SUA claimants at the other side of the building. After putting the partially completed application in the SUA pile, Starkey went back to her office. Starkey further testified that she did not know that McCoy was not eligible for the $2,028 in benefits she eventually received.

Although McCoy’s application was processed without being completely filled out, Starkey’s supervisor, Miles Paris, testified that in September of 1976 it was not unusual for uncompleted applications to be processed. The SUA program was new at the time, and as the hearing officer found, “[I]n 1976, things were in a state of chaos at the Waukegan B.E.S. office.”

In 1977, the Illinois Department of Law Enforcement (DLE) began an investigation of the Waukegan BES office, focusing on an employee named Marilyn Blye. Blye was Starkey’s principal accuser at the hearing which resulted in this appeal. However, Blye was under indictment by the time the charges against Starkey were heard, and she did not testify against Starkey. Instead, Blye’s unsworn and un-cross-examined “testimony” was given through two DLE agents who testified that during the course of their investigation they interviewed Blye at the Waukegan police station and at the office of the State’s Attorney. According to one of the agents:

“« # » i asked Marilyn Blye if there were any other employees in the local office in Waukegan who were involved in filing false claims. Blye replied that Josie Starkey had filed a false claim for her mother. She said that Josie Starkey brought the claim to her while she was at a computer terminal. She said she thought that Miss Starkey stated that her mother had not been working as listed in the claim.
Blye stated she thought, Blye thought, Starkey told her at the time that her mother had not been working as listed in the complaint.” (Emphasis added.)

Despite the fact that the agent initially testified that Blye merely reported what she “thought” was Starkey’s knowledge of a fraudulent claim, the agent later gave a much more damaging version of Blye’s statements. According to this second version of the agent’s recollection, Blye said that Starkey admitted to Blye that McCoy’s claim was fraudulent. The agent further testified that Blye said that Starkey showed her how to enter a fraudulent claim in the BES computer.

The testimony of the second agent was similar to the more damaging version of the first agent’s testimony. However, the second agent also testified that Starkey had helped in the investigation of Blye, and that Blye believed that Starkey was responsible for Blye’s own discharge.

At the close of the hearing, the hearing officer found that McCoy had not been entitled to the SUA benefits she received. “It is clear that a false claim was entered on behalf of claimant McCoy. It is not clear, however, that respondent Starkey participated in any way, except to a very small degree, in the processing of that claim.” The “ultimate issue,” as the hearing officer viewed the case, was whether Starkey knowingly participated in a scheme to defraud the State. Having had an opportunity to observe Starkey’s demeanor while she testified, the hearing officer found that her testimony was truthful. Specifically, the hearing officer expressly found that “Starkey’s testimony is credible,” and “Her word is good.” Moreover, the hearing officer found that: (1) Blye processed McCoy’s partially completed application in an “attemp[t] to please her supervisor [Starkey] by ‘taking care of’ her relatives”; and (2) that Blye’s statements to the DLE agents were motivated by her strong resentment toward Starkey.

Based upon his detailed 38-page report of findings and conclusions, the hearing officer concluded that the charges against Starkey had not been proved, and that she should be retained in her job.

After reviewing the record, but without having had an opportunity to observe the demeanor of the witnesses, the Civil Service Commission stated that “We cannot accept the proposition that Respondent, an experienced employee, could have by happenstance processed a fraudulent claim for her mother. Respondent’s defense is not credible.” (Emphasis added.) The Commission further concluded that the charges had been proved.

On appeal, Starkey contends (1) that the Commission lacked authority to discharge her because the charges were amended without being re-approved by the Director of the Department of Personnel, and (2) that the evidence is not sufficient to support the Commission’s decision. The second issue is dispositive.

I

A. Standard of Review

Starkey argues that the Commission’s findings are “against the manifest weight of the evidence.” The Commission counters by arguing that there is “substantial evidence” to support the finding that Starkey acted with knowledge that her mother was ineligible for the requested benefits.

Our first task is to determine the appropriate standard of review. Section 11 of the Administrative Review Act states that “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.) Rut, despite this presumption that the fact findings of administrative agencies are true and correct, it has been well-settled Illinois law that the findings of fact reached by administrative agencies must be based upon “substantial evidence.” Gibbs v. Orlandi (1963), 27 Ill. 2d 368, 371, 189 N.E.2d 233; Bruce v. Department of Registration & Education (1963), 26 Ill. 2d 612, 622, 187 N.E.2d 711.

“On administrative review the issue is not whether the court approves the action taken by the administrative body but whether there was substantial evidence to support the decision.” (Heft v. Zoning Board of Appeals (1964), 31 Ill. 2d 266, 270-71, 201 N.E.2d 364.) The supreme court explained, in Menning v. Department of Registration and Education (1958), 14 Ill. 2d 553, 558, 153 N.E.2d 52, that judicial review of administrative fact finding, under the Administrative Review Act, is comparable to the procedure used in determining whether there is “substantial evidence” to support the judgment of a lower court. See also McCormick, Evidence sec. 352 at 847 (2d ed. 1972).

The “substantial evidence” rule is the standard used for judicial review of administrative fact-finding in the Federal and in most State courts. (4 Davis, Administrative Law Treatise sec. 29.11, at 186 (1958).) Nevertheless, despite the line of Illinois cases which invoked the “substantial evidence” standard, the supreme court, in 1974, expressly rejected use of the “ ‘substantial evidence’ standard as used in the Federal system for review of administrative matters.” Basketfield v. Police Board (1974), 56 Ill. 2d 351, 358, 307 N.E.2d 371, appeal after remand (1979), 71 Ill. App. 3d 877, 390 N.E.2d 492.

Without mentioning or overruling the Illinois cases which have used the “substantial evidence” standard, the court held that “[u]nder the Administrative Review Act the permissible scope of judicial inquiry concerning factual determinations by administrative agencies has been limited to ascertaining if the agency decision was contrary to the manifest weight of the evidence. (Davern v. Civil Service Com. of Chicago, 47 Ill. 2d 469, 471-72, cert. denied, 403 U.S. 918.)” (Basketfield v. Police Board (1974), 56 Ill. 2d 351, 358-59.) However, despite the fact that Davern is cited in support of the proposition that the sole test to be used in Illinois is the “manifest weight” standard, the court held in Davern that courts “are limited to a determination whether the final decision of the administrative agency is just and reasonable in light of the evidence presented.” 47 Ill. 2d 469, 471. See also Menning v. Department of Registration and Education (1958), 14 Ill. 2d 553, 561 (“[T]his court is not bound to believe that facts in evidence establish a conclusion if the conclusion is not reasonable • * *”); and Outboard Marine & Manufacturing Co. v. Gordon (1949), 403 Ill. 523, 528, 87 N.E.2d 610 (each of the two tests referred to as justifying reversal of agency findings).

Based on Basketfield, however, we conclude that the “manifest weight” standard is the applicable standard for judicial review of administrative fact-finding in Illinois.

B. Review of the Entire Record

Section 11 of the Administrative Review Act provides that judicial review “shall extend to all questions of law and of fact presented by the entire record before the court.” (Ill. Rev. Stat. 1979, ch. 110, par. 274.) And section 9 specifies that the “entire record” includes all the evidence that was presented to the administrative agency. (Ill. Rev. Stat. 1979, ch. 110, par. 272(b).) This means that “[i]n examining the record, a reviewing court will and must look at all the evidence in opposition to the challenged finding as well as the evidence which tends to support it.” Viera v. Illinois Racing Board (1978), 65 Ill. App. 3d 94, 100, 382 N.E.2d 462; accord, Universal Camera Corp. v. NLRB (1951), 340 U.S. 474, 488, 95 L. Ed. 456, 467-68, 71 S. Ct. 456, 464-65.

We agree that, “It is hard to see how sensible judges could conceivably appraise the substantiality of evidence in a record without looking at the evidence on both sides, for evidence has significance only in a context, not in the abstract.” 4 Davis, Administrative Law Treatise sec. 29.03, at 127 (1958).

Moreover, the “entire record of proceedings under review” (Ill. Rev. Stat. 1979, ch. 110, par. 272(b)) clearly includes the findings of fact reached by the agency’s hearing officer on the issue of testimonial credibility. (See 4 Davis, Administrative Law Treatise sec. 29.11, at 187 (1958).) “Surely an examiner’s report is as much a part of the record as the complaint or the testimony.” Universal Camera Corp. v. NLRB (1951), 340 U.S. 474, 493, 95 L. Ed. 456, 470, 71 S. Ct. 456, 467.

C. Review of Determinations of Testimonial Credibility

Evidence which, by itself, may be sufficient to support an agency’s findings of fact may be insufficient “when the trial examiner has, on the basis of the witnesses’ demeanor, made credibility determinations contrary to the Board’s position.” (Penasquitos Village, Inc. v. NLRB (9th Cir. 1977), 565 F.2d 1074, 1078; see also Kelley v. Murphy (1967), 20 N.Y.2d 205, 282 N.Y.S.2d 254, 229 N.E.2d 40.) When a hearing officer and an administrative agency reach contrary findings of fact, the hearing officer’s findings should be given such deference “as they merit within reason and the light of judicial experience.” Adolph Coors Co. v. FTC (10th Cir. 1974), 497 F.2d 1178, 1184, cert. denied (1975), 419 U.S. 1105, 42 L. Ed. 2d 801, 95 S. Ct. 775; see also McDonald v. Department of Banking & Finance (Fla. App. 1977), 346 So.2d 569, 579.

A hearing officer’s finding of fact on the issue of testimonial credibility is entitled to a certain degree of deference “for the obvious reason that he or she ‘sees the witnesses and hears them testify, while the Board and the reviewing court look only at cold records.’ ” (Penasquitos Village, Inc. v. NLRB (9th Cir. 1977), 565 F.2d 1074, 1078; see also Michigan Employment Relations Com. v. Detroit Symphony Orchestra, Inc. (1974), 393 Mich. 116, 127, 223 N.W.2d 283, 289.) Therefore, the significance of the hearing officer’s findings “depends largely on the importance of credibility in the particular case.” Universal Camera Corp. v. NLRB (1951), 340 U.S. 474, 496, 95 L. Ed. 456, 472, 71 S. Ct. 456, 469; see also Townsend v. Nelson (Minn. 1976), 242 N.W.2d 607, 608-09.”

D. The Residuum Rule

An obiter dictum in Menning v. Department of Registration and Education (1958), 14 Ill. 2d 553, 558 (“[T]he findings of an administrative agency * ” ” must rest upon competent evidence * ” *” (emphasis added)) seems to indicate that Illinois follows the much criticized residuum rule. “The residuum rule requires a reviewing court to set aside an administrative finding unless the finding is supported by evidence which would be admissible in a jury trial.” 2 Davis, Administrative Law Treatise sec. 14.10, at 291-92 (1958); see also Professor Davis’ well reasoned criticism of the rule at 293-96.

As applied to the facts of the present case, the residuum rule would require that we reverse the Commission’s decision because it is based upon the “incompetent” hearsay statements attributed to Marilyn Blye. However, we conclude that the better reasoned rule is that hearsay which is not admissible in a jury trial may be sufficient to support the finding of an administrative agency, if more reliable evidence is not available, “and if in the end the finding is supported by the kind of evidence on which responsible persons are accustomed to rely in serious affairs.” (NLRB v. Remington Rand, Inc. (2d Cir. 1938), 94 F.2d 862, 873 (per J. Learned Hand), cert. denied (1938), 304 U.S. 576, 82 L. Ed. 1540, 85 S. Ct. 1046.) “Hearing officers and agencies have adhered to this commonsense standard instinctively.” McCormick, Evidence sec. 351, at 844 (2d ed. 1972).

II

Despite the fact that the hearing officer found that “Starkey’s testimony is credible,” the Commission — without having had an opportunity to observe her demeanor as a witness — simply rejected her “defense” as “not credible.” We conclude, however, that, in this case, the hearing officer’s determination of testimonial credibility is entitled to deference. The charges against Starkey stand or fall based on the question of whether Starkey testified truthfully when she denied the alleged misconduct, or whether Blye’s unsworn and un-cross-examined accusations were true. Since testimonial credibility is the crucial factual issue in this case, both logic and judicial experience require that courts give deference to the findings on the issue of testimonial credibility reached by the hearing officer who had an opportunity to evaluate the witnesses in person. The Civil Service Commission’s arbitrary action in summarily rejecting Starkey’s “defense” as “not credible,” after nothing more than its reading of a cold transcript, convinces us that the Commission failed to give Starkey a full and fair hearing. And, we conclude that the Commission’s decision is against the manifest weight of the evidence which was presented to the Commission.

Any expertise which the Civil Service Commission has in the field of labor-management relations and any special knowledge which the Commission might have outside the record concerning the operation of the Department of Labor’s Waukegan office, do not give the Commission any special ability or expertise in re-evaluating its hearing officer’s findings on the issue of testimonial credibility. As a reviewing court, we are acutely aware of the inadequacy of “second guessing” a trier of fact’s findings on the issue of testimonial credibility based on a review of a cold transcript. Thus, it is fundamental that a reviewing court should give deference to the trier of fact’s decision on the issue of the credibility of witnesses. See, e.g., People v. Walker (1978), 58 Ill. App. 3d 535, 538, 374 N.E.2d 880.

Furthermore, as an alternative basis for our decision in this case, we conclude that the inculpatory evidence presented below is not sufficient to support the Commission’s decision. The Commission refers to the testimony from the DLE investigators detailing Marilyn Blye’s unsworn and un-cross-examined accusations. But, we note that (a) Blye was the target of a criminal investigation at the time these statements were allegedly made; (b) Blye made the accusatory statements while being interviewed at a police station and at the office of a prosecutor; (c) Starkey cooperated with the agents who were investigating Blye; (d) Blye believed that Starkey was responsible for her discharge; and (e) one of the agents initially testified that Blye merely said she thought that Starkey admitted being guilty of fraud. We are simply unable to conclude that reasonable people would rely on this unsupported hearsay evidence in the conduct of serious affairs. Thus, Blye’s unsworn and un-cross-examined accusations are not sufficient to support the Commission’s decision.

In short we conclude that this vital piece of unsupported inculpatory evidence lacks sufficient probative value, and that the hearing officer’s determination that Starkey’s exculpatory testimony was truthful is a finding which is entitled to deference. Although we are not permitted to freely substitute our judgment for the one reached by the Civil Service Commission, it is fundamental that, as an appellate court, we are obligated to reverse a decision which is against the manifest weight of the evidence. The decision reached by the Civil Service Commission in this case is patently wrong, and it is, therefore, against the manifest weight of the evidence. Accordingly, the decisions of both the trial court and the Commission are reversed.

Because Starkey prays for reinstatement and the compensation provided for in section lib of the Personnel Code (Ill. Rev. Stat. 1979, ch. 127, par. 63blllb), we remand this cause to the trial court for further proceedings not inconsistent with this opinion.

Civil Service Commission reversed; circuit court reversed; cause remanded to the circuit court with directions.

MEJDA, J., concurring.

PRESIDING JUSTICE SULLIVAN,

dissenting:

I disagree with the decision of the majority.

The majority held the Commission’s decision was against the manifest weight of the evidence because of two conclusions — (1) that Blye’s testimony inculpating Starkey “lacked sufficient probative value”; and (2) that the Commission did not give proper deference to its hearing officer’s conclusions “that Starkey’s exculpatory testimony was truthful.”

Neither of the majority’s conclusions is supported by the record. First, while the majority finds that Blye’s testimony was lacking in probative value, the hearing officer found that “the evidence of Marilyn Blye was the most probative gathered in this case” and that “there is no reason to doubt the investigators’ recantation of Blye’s statement.”

Furthermore, tenuous reasons are given by the majority in concluding that Blye’s testimony was lacking in probative value. They are (1) Blye was the target of a criminal investigation at the time her statements were made; (2) Blye made the statements while being interviewed at a police station and at the office of an investigator; (3) Blye believed that Starkey was responsible for her discharge; (4) Starkey cooperated with agents who were investigating Blye; and (5) “one of the agents initially testified that Blye merely said she thought that Starkey admitted being guilty of fraud.” As to (1), there is nothing to indicate that Blye was the target of a criminal investigation. Investigator McDermott testified that at the time of the first interview with her, he and the other officers “were interested in claims that she may have been involved in which could have been false,” and it was at the second interview that she was asked whether other employees were involved in filing false claims; as to (2) the place at which the interviews were had with Blye have no relevance whatsoever; as to (3), the fact that Blye believed Starkey was responsible for her discharge would only go to her credibility and has little significance because it was drawn by the majority from one statement to the investigator that she said Starkey was responsible for the loss of her job and at the same time told him that she was not out to get Starkey, and there is nothing else in the record indicating that Blye may have been resentful or which even remotely suggests that Blye’s statements inculpating Starkey were untruthful; as to (4), there is nothing to indicate that Blye knew that Starkey had cooperated with anyone investigating her (Blye); and, as to (5), no agent testified, as stated by the majority, “that Blye merely said she thought Starkey admitted being guilty of fraud.” The only testimony in this regard was from Investigator McDermott, who stated that during a second interview with Blye — when he asked her whether other employees were involved in filing false claims — she replied as follows: “[T]hat Josie Starkey had filed a false claim for her mother. She said that Josie Starkey brought the claim to her while she was at the computer terminal. She said she thought that Miss Starkey stated that her mother had not been working as listed in the claim.” McDermott testified also that:

“Blye stated that Starky [sic] brought the claim to her, and that Blye input it. Blye stated that she knew that Mrs. McCoy was not working as claimed, and Mrs. Starky [sic] just merely laughed. Starky [sic] repeated to Blye that to file a claim for unemployment compensation, which would be incorrect, a false claim, all that was needed was a social security number, and to put the wages in by affidavit. She also stated that Starky [sic] also told her that an address or addresses would be needed to which the employer’s notices would be sent. These would be the employer’s notices of the last employing unit, and the base period employer. She also stated that it was called an S.U.A. claim. Blye stated that just because the address was incomplete, did not mean that the notices to the employers would not go out. They would go out, but would be returned by the post office as undeliverable if the addresses were incomplete. I believe that was the extent of the conversation with Marilyn Blye at that time.”

Investigator Tobias corroborated that testimony of McDermott, and the testimony of both investigators concerning the statements of Blye were admitted by the hearing officer under the declaration against interest exception to the hearsay rule.

In the light of the above, it appears clear that the reasons given by the majority do not support its conclusion that Marilyn Blye’s inculpatory testimony lacked probative value.

The second conclusion given in support of the majority’s decision was “that the hearing officer’s determination that Starkey’s exculpatory testimony was truthful is a finding which is entitled to deference.” The record, however, discloses no finding that Starkey was truthful. Rather, after finding that a false claim was clearly entered on behalf of McCoy and that Starkey did not participate in the processing of that claim except to a very small degree, the hearing officer went on to find that Blye’s statement “indicated Starkey was actively engaged in the fraudulent scheme”; that Blye “indicated to the investigators that she and Starkey discussed how claims could be submitted fraudulently”; and that Blye indicated that she held Starkey responsible for her (Blye’s) losing her job. The hearing officer then concluded that “fortunately for Starkey this [the resentment of Blye towards Starkey] absolves her [Starkey] of all liability.” Thus, although the hearing officer found that McCoy’s claim was clearly false and that Starkey had participated at least to a small degree, he absolved her of all liability because of a conclusion, reached by pure conjecture, that Blye’s inculpatory statements were the result of resentment towards Starkey. Blye, of course, did not testify, and the only reference to possible resentment appears in the testimony of Investigator McDermott that Blye said that she was not friendly with Starkey because she thought Starkey was responsible for the loss of her job, but that she (Blye) never said she would get even with Starkey. This testimony could not support the finding of the hearing officer that Blye’s resentment was so strong that it absolved Starkey of all liability.

It was only after this absolution that the hearing officer found that “Starkey’s testimony was credible,” which is not a finding that her testimony was truthful, as Black’s Law Dictionary 330 (5th ed. 1979) defines credible as “[w]orthy of belief; entitled to credit.”

Moreover, although concluding that the Commission did not give proper deference to a finding of the hearing officer, the majority gives no deference to the finding of the Commission that Starkey’s defense was not credible even though its members are presumed to have broad experience in the field of labor-management relations. (See Penasquitos Village, Inc. v. NLRB (9th Cir. 1977), 565 F.2d 1074; NLRB v. Miller Redwood Co. (9th Cir. 1969), 407 F.2d 1366.) In this regard, Miller Redwood appears to be particularly significant. There, the trial examiner and the Board disagreed upon the employer’s motive for discharging an employee. The court upheld the Board’s position, stating “[t]he disagreement related solely to the inferences to be drawn from the whole record and the proper application of the statute. In such a case, ‘the presumptively broader gauge and experience of members of the Board have a meaningful role.’ ” 407 F.2d 1366, 1369.

For a judgment of an administrative agency to be against the manifest weight of the evidence, it must appear that opposite conclusions are clearly evident; it is not enough that an opposite conclusion might be reasonable because, if the issue is merely one of conflicting testimony and credibility of witnesses, the agency’s determination should be sustained. (Keen v. Police Board (1979), 73 Ill. App. 3d 65, 391 N.E.2d 190; Walker v. State Board of Elections (1979), 72 Ill. App. 3d 877, 391 N.E.2d 507.) Furthermore, while the majority cites Adolph Coors Co. v. FTC (10th Cir. 1974), 497 F.2d 1178, cert. denied (1975), 419 U.S. 1105, 42 L. Ed. 2d 801, 95 S. Ct. 775, for the proposition that where a hearing officer and a commission reach opposite results upon review of the finding of the former, the hearing officer’s findings should be “given such weight as they merit within reason and in the light of judicial experience” (497 F.2d 1178, 1184), the majority does not discuss the application of the quoted language to the situation here. We note that it was also held in Coors that the findings of the hearing officer “are not sacrosanct and are not necessarily binding on the Commission or the court.” 497 F. 2d 1178, 1184.

In any event, in its decision the Commission did not disagree with the finding that Starkey’s testimony was credible; rather, it found her defense was not worthy of belief, stating that “taking the record as a whole it is clear that petitioner has proved the charges. We cannot accept the proposition that respondent, an experienced employee, could have by innocent happenstance processed a fraudulent claim for her mother. Respondent’s defense is not credible.”

The record discloses that a person seeking benefits was required to fill out an application form, to execute an affidavit of wages, and to furnish proof of those wages, which was done here by check stubs; that wage information is then verified by mailing a copy of the affidavit to the employer; that this is accomplished by entering the affidavit of wages into the computer which generates the verification letter sent to the employer; that McCoy testified two forms were presented to her — one being an application which she said was filled out by Starkey and the other a form filled out by a person she did not know — but that she (McCoy) made no entries and did no writing on either form; and that both investigators testified Starkey told them she had prepared the application which was processed on behalf of McCoy, and Starkey made no denial of this testimony. Starkey testified that she only partially filled out the application of her mother; that she did not (1) place the mark in the dependent child’s box — which gave her mother additional benefits, although there was no such child — ; (2) place the dash which appears in the place provided for the claimant’s signature (the application was not signed); or (3) erase what appears to be her signature — “J. Starkey” — at the bottom of the application. Starkey admitted that she wrote in both the name of H. Holmquist as her mother’s employer in 1976 and the date of August 27, 1976, as her mother’s last day of employment by the Holmquists. (The application was dated September 13, 1976.) She stated also that the address of the Holmquists was not written in the application by her, although she had also worked for them a few days that year. (The address does not appear on the form, and it should be noted that the failure to provide an address would prevent a certification letter being sent to an employer.) Moreover, Starkey said that she knew her mother should have signed the application and did not know why she had not done so, and that although Starkey testified at the hearing that she personally knew her mother had worked for the Holmquists until August 27,1976, the date she (Starkey) entered in the application as her mother’s last date of employment by the Holmquists, it is clear that her mother did not work for them for at least 6 or 7 years prior to the date of the claim.

Thus, it was established that false wage information and false or nonexistent wage verification concerning McCoy must have been put into the computer, and from Blye’s testimony that Starkey was actively engaged in the fraud scheme in that she came to her (Blye) with the application of McCoy and told her (Blye) to put it through the computer. The initials “MB” appearing at the bottom of McCoy’s application are apparently those of Marilyn Blye, and the erased signature “J. Starkey” is still discernible on the application. Having this and the other evidence received at the hearing, some of which is set forth above, the experienced members of the Commission found that her defense was not credible. The Commission found, in effect, that her defense of knowing nothing about her mother’s false claim except that she filled out a portion of the application was not worthy of belief, and it appears to me that this conclusion is amply supported by the record. In any event, it cannot fairly be said that a decision opposite to that of the Commission is clearly evident.

In the light of the above, it is my belief that there is no record basis for the finding of the majority that the decision of the Commission was against the manifest weight of the evidence, and I would affirm the Commission’s decision.

       Because of our resolution of this case, we need not decide whether Starkey was improperly deprived of the right to cross-examine Marilyn Blye, the person whose hearsay accusations formed the basis for the Commission’s decision. See, e.g., Erdman v. Ingraham (1967), 28 App. Div. 2d 5, 280 N.Y.S.2d 865 (respondent in administrative proceedings was improperly deprived of right to cross-examine his accusers because the agency fact-findings were based on an investigator’s testimony about accusations made by persons who were not available for cross-examination).

       The check stubs could not be found and were not introduced at the hearing.


source: Caselaw Access Project

author: JUSTICE LORENZ

license: Public Domain

text:
    JOHN WESLEY BURKS, Plaintiff-Appellant, v. ISOURA MADYUN, Defendant-Appellee.
    First District (5th Division)
    No. 80-3231
    Opinion filed April 16, 1982.
    Alan Kawitt, of Law Offices of Alan Kawitt, of Chicago (Marilyn Floyd, of counsel), for appellant.
    McKenna, Storer, Rowe, White & Farrug, of Chicago (Robert S. Soderstrom and Shaun McFarland, of counsel), for appellee.
   JUSTICE LORENZ

delivered the opinion of the court:

The plaintiff, John Burks, filed a one-count complaint against defendant, Isoura Madyun, seeking damages for personal injuries suffered as a result of defendant’s wilful and wanton negligence in not warning him against the danger of criminal attack by third persons while on her premises. Defendant moved to dismiss the second amended complaint for failure to state a cause of action apparently pursuant to section 45 of the Civil Practice Act (Ill. Rev. Stat. 1975, ch. 110, par. 45). The trial court granted defendant’s motion to dismiss and plaintiff appeals from that order.

The issues on appeal are (1) whether plaintiff’s second amended complaint was improperly dismissed with prejudice for failure to set forth facts demonstrating that defendant had both notice of imminent danger to plaintiff and was also in special relationship with him, which gave rise to a legal duty to warn or protect him against the criminal acts of third parties, and (2) whether the complaint was improperly dismissed for failure to state a cause of action for wilful and wanton misconduct as a matter of law.

Plaintiff’s second amended complaint contained the following pertinent allegations. Defendant owned and occupied the premises at 5631 S. Hoyne Avenue in Chicago, Illinois, as a family residence. On March 28, 1979, defendant invited plaintiff upon the property to stay with her high-school aged boys for a certain fee so that she might attend to personal business. The pleading alleged that defendant had an affirmative duty to warn plaintiff of the “extremely dangerous situation” into which she was placing him.

Specifically, plaintiff alleged that defendant was guilty of the following wilful and wanton misconduct: (1) misstating to plaintiff that her boys were merely having trouble “at school” when they were actually having trouble “with gangs at school,” (2) withheld information from plaintiff that her boys had had threats upon their lives from these gangs who knew where the boys lived, (3) withheld information from plaintiff that his life and/or limbs would be in danger should he stay with her boys, (4) induced plaintiff to stay upon her property with her boys when she either knew or should have known of danger to him in doing so, and (5) was otherwise guilty of wilful and wanton misconduct.

The complaint further alleged that as a result of this misconduct, and while he was upon defendant’s property in a special relationship, her house was broken into by one or more third persons who shot him, causing him severe bodily injuries.

Defendant’s motion to dismiss argued that plaintiff’s complaint failed to state a cause of action. In support thereof, she argued that a duty to protect another from criminal acts by third persons exists under Illinois law only when there is both a “special relationship” between the defendant and the person who suffers harm, and only if the defendant has notice of the danger. Defendant maintained that the complaint failed to set forth facts demonstrating either a special relationship with the plaintiff or notice of the danger, and, therefore, defendant had no legal duty to warn plaintiff of any potential danger of criminal attack by third persons.

After reviewing the parties’ memoranda and hearing argument, the trial court determined that plaintiff’s second amended complaint failed to state a cause of action and issued an order dismissing it with prejudice.

Opinion

We turn first to the contention of whether the complaint states a cause of action sufficient to withstand the motion.

The Civil Practice Act provides that pleadings shall be liberally construed with a view to doing substantial justice (Ill. Rev. Stat. 1973, ch. 110, par. 33(3)) although it will not sustain a complaint which wholly fails to state a cause of action. Smith v. Chicago Housing Authority (1976), 36 Ill. App. 3d 967, 344 N.E.2d 536.

In determining the legal sufficiency of a complaint on a motion to dismiss, all well pleaded facts are to be taken as true (Fitzgerald v. Chicago Title & Trust Co. (1978), 72 Ill. 2d 179, 380 N.E.2d 790), and a reviewing court must determine whether the allegations of the complaint, when interpreted in the light most favorable to plaintiff, are sufficient to set forth a cause of action upon which relief may be granted. Farns Associates Inc. v. Sternback (1979), 77 Ill. App. 3d 249, 395 N.E.2d 1103.

Plaintiff argues that his second amended complaint set forth facts which demonstrate that defendant had a special relationship with him which gave rise to a legal duty to warn or protect him against the criminal acts of third parties, and therefore his complaint was improperly dismissed.

Necessary to recovery in the present case is the existence of a duty or an obligation requiring one to conform to a certain standard of conduct for the protection of another against an unreasonable risk. (Fancil v. Q.S.E. Foods, Inc. (1975), 60 Ill. 2d 552, 328 N.E.2d 538.) Under Illinois law, a complaint must allege the breach of a duty owed by the defendant to the plaintiff in order to state a cause of action for negligence. (Boyd v. Racine Currency Exchange, Inc. (1973), 56 Ill. 2d 95, 306 N.E.2d 39.) The existence of a duty, the legal obligation imposed upon one for the benefit of another, is a question of law to be determined by the court. Barnes v. Washington (1973), 56 Ill. 2d 22, 305 N.E.2d 535.

Plaintiff argues that the relationship between the defendant and himself is a special relationship such that the defendant had a duty to warn him of danger or otherwise insure his safety. The complaint alleges that he was invited upon her property for the express purpose of caring for her high school children in exchange for a fee, i.e., as a “babysitter.”

In deciding whether a special relationship exists, the Illinois courts have relied upon the Restatement (Second) of Torts. (Mitchell v. Archibald & Kendall, Inc. (7th Cir. 1978), 573 F.2d 429.) The Restatement (Second) of Torts §314A (1965) lists four special relations that give rise to a duty to protect another from harm. They are: (1) carrier-passenger, (2) innkeeper-guest, (3) business inviter-invitee, and (4) one who voluntarily takes custody of another under circumstances such as to deprive the other of his normal opportunities for protection.

In the present case, plaintiff concedes that the first, second and fourth relationships are not applicable to the facts of the case. He maintains, however, that he was a business invitee on defendant’s premises at the time the criminal assault occurred.

An invitee, as that term has evolved in Anglo-American law, is a person who goes on the property of another by express or implied invitation to transact business in which he and the owner have a mutual interest. (Ellguth v. Blackstone Hotel, Inc. (1951), 408 Ill. 343, 97 N.E.2d 290.) He is invited on the premises of the owner to promote some real or fancied material, financial, or economic interest of the owner. Madrazo v. Michaels (1971), 1 Ill. App. 3d 583, 274 N.E.2d 635.

To his invitee the owner is liable for injuries caused by the failure to exercise due care to make the premises reasonably safe for the invitee’s use. Sansone v. Atchison, Topeka & Santa Fe Ry. Co. (1967), 83 Ill. App. 2d 435, 228 N.E.2d 101.

Illinois decisional law supports the rule that a person is an invitee on the land of another if (1) he enters by invitation, express or implied, (2) his entry is connected with the owner’s business or with an activity the owner conducts or permits to be conducted on his land, and (3) there is a mutuality of benefit or a benefit to the owner. Madrazo v. Michaels (1971), 1 Ill. App. 3d 583, 274 N.E.2d 635.

Defendant argues that plaintiff’s status as a babysitter is not included within the business inviter-invitee relationship. However, as the court in Madrazo observed, “Common sense tells us all that one who goes to the home of another to * * * care for his children is not partaking of diversion or hospitality. * * * Therefore, plaintiff was not defendants’ social guest; [he] was their invitee. Benedict v. Podwats (1970), 109 N.J. Super. 402, 263 A.2d 486; Brant v. Matlin (Ct. App. Fla. 1965), 172 So.2d 902; Murdock v. Petersen (1958), 74 Nev. 363, 332 P.2d 649.” 1 Ill. App. 3d 583, 587-88.

In the case at bar, the complaint alleged that plaintiff was expressly invited upon defendant’s property to care for her children, in exchange for a fee. Applying the foregoing principles to the language of the complaint, we find that plaintiff has sufficiently alleged facts which set forth that he was an invitee on defendant’s property. Accordingly, we conclude that he was in a special relationship with the defendant.

Plaintiffs second contention on appeal is that defendant breached the duty owed to him as an invitee by failing to warn him of the imminent danger of criminal attack by third persons.

Generally, there is no duty to protect one against the criminal attacks of third persons. (Boyd v. Racine Currency Exchange, Inc. (1973), 56 Ill. 2d 95, 306 N.E.2d 39.) An owner or occupier of land in Illinois owes a duty to invitees on his premises to reasonably guard against acts of third parties only when circumstances charge him with knowledge of this danger. Neering v. Illinois Central R.R. Co. (1943), 383 Ill. 366, 50 N.E.2d 497.

Thus, the imposition of a duty to guard against criminal attacks by third persons depends upon notice of the danger to the invitee in addition to the existence of a special relationship. O’Brien v. Colonial Village, Inc. (1970), 119 Ill. App. 2d 105, 255 N.E.2d 205; Fancil v. Q.S.E. Foods, Inc. (1975), 60 Ill. 2d 552, 328 N.E.2d 538.

Yet is is only when such attacks are reasonably foreseeable, and the burden of preventing such attacks can reasonably be placed upon the defendant, that a duty arises to protect an invitee from criminal attack. Krautstrunk v. Chicago Housing Authority (1981), 95 Ill. App. 3d 529, 420 N.E.2d 429.

Therefore, absent knowledge of previous incidents or special circumstances which would charge the owner with knowledge of the danger and the duty to anticipate it, the common law duty of reasonable care owed to a person lawfully on the premises cannot be extended to a duty to guard against the criminal attacks of third persons. (Mitchell v. Archibald & Kendall, Inc. (1978), 573 F.2d 429; O’Brien v. Colonial Village, Inc. (1970), 119 Ill. App. 2d 105, 255 N.E.2d 205.) More than a mere possibility of such an occurrence is required. Cunis v. Brennan (1974), 56 Ill. 2d 372, 308 N.E.2d 617.

In the present case, plaintiff does not allege that criminals were known to have been present on the defendant’s premises, or that her children were previously assaulted by gangs on her premises or elsewhere.

The complaint merely alleged, inter alia, that the defendant’s children had received threats upon their lives from gangs, and that she withheld information from plaintiff that his life would be in danger if he stayed with her boys.

Since mere allegations of legal conclusions are insufficient, and such conclusions need not be accepted by a court (Morse v. Nelson (1977), 48 Ill. App. 3d 895, 363 N.E.2d 167), we find that the facts set forth in the complaint are not sufficient to constitute notice in the present case.

Accordingly, we hold that the complaint did not state a cause of action against the defendant.

In light of our decision, we need not consider the issue of wilful and wanton negligence which was raised by the plaintiff.

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

Affirmed.

SULLIVAN, P. J., and WILSON, J., concur.


text:
    THE PEOPLE ex rel. THE DEPARTMENT OF PUBLIC AID, PlaintiffAppellee, v. SHEILA JONES, Defendant-Appellant.
    First District (5th Division)
    No. 81-0087
    Opinion filed April 16, 1982.
    Tyrone C. Fahner, Attorney General, of Chicago (Richard D. Grossman, Special Assistant Attorney General, of counsel), for appellee.
    Beverly V. Groudine and James R. Potter, both of Legal Assistance Foundation, of Chicago, for appellant.
   JUSTICE LORENZ

delivered the opinion of the court:

The Department of Public Aid filed an action to recover an “over-issuance” of the financial aid that was paid to defendant, a public aid recipient who failed to report her income from a part-time job at Walgreens. The sole issue on appeal is whether the trial court properly calculated the amount of damages incurred by the State because of defendant’s failure to report a source of earned income. The following facts are material to our decision.

From September 1974 through May 1975 defendant received $3,850.90 in public assistance, but she failed to report that she earned $2,225.09 during this period of time. If she had reported this source of earned income, the amount of defendant’s aid payments would have been decreased by the amount earned minus certain statutory deductions. See 42U.S.C. §602 (1973 Supp.).

The Department filed a two-count complaint to recover the amount of “over-issuance.” Count 2 alleged that, in failing to report her earned income, defendant acted with fraudulent intent. Section 11 — 21 of the Illinois Public Aid Code (Ill. Rev. Stat. 1975, ch. 23, par. 11 — 21) makes a recipient liable for “refunding the entire amount of aid received” if the recipient failed to report income with intent to defraud the State. Thus, if the Department proved that defendant had fraudulent intent, she would have been liable for $3,850.90, “the entire amount of aid received.” In addition to this measure of damages, section 11 — 21 also authorizes a court to award punitive damages in an amount up to the entire amount of aid received.

The trial court dismissed count 2, and the Department has not cross-appealed from that order.

Count 1 of the Department’s complaint is based on section 11 — 18 of the Illinois Public Aid Code. (Ill. Rev. Stat. 1975, ch. 23, par. 11 — 18.) Under this section, a recipient who fails to report a source of income “shall be liable * * * for refunding a sum of money up to but not in excess of the entire amount of financial aid provided.” So, if the Department proves fraudulent intent, the measure of damages under section 11 — 21 is the entire amount of aid received, plus possible punitive damages. But, even if the Department fails to prove fraudulent intent, it can still recover damages under section 11 — 18.

In the present case, count 1 of the Department’s complaint alleges that, because of defendant’s failure to report the income from her job at Walgreens, the State of Illinois “was and is damaged in the sum of $2,225.09.” Thus, the Department claims that the State was damaged in an amount which is equivalent to the $2,225.09 defendant received from her part-time job. However, if the defendant had reported this income, the Department would have applied the statutory deductions from the amount of earned income before calculating the decrease in her assistance payments. Therefore, the actual damages suffered by the State from defendant’s failure to report her earned income is less than the total amount she received from this unreported job. Nevertheless, the Department successfully argued below that, under section 11 — 18, it did not have to apply these statutory deductions when calculating the amount of damages suffered by the State.

We conclude that this ruling was incorrect. Under the Department’s construction of section 11 — 18, it could recover an amount up to the entire amount of aid received (i.e., it could recover more than actual damages) even in the absence of a finding of fraudulent intent. But, to permit the Department to recover more than actual damages under section 11 — 18 would mean that the legislature performed a useless act when it required the Department to prove fraudulent intent before recovering the entire amount of benefits paid.

When section 11 — 18 is read in conjunction with section 11 — 21 it is clear that, in a case where the Department is unable to prove intent to defraud, a recipient is liable only for the actual damages suffered by the State. In the present case, actual damages is the difference between the amount of aid defendant received and the amount of aid she would have received if she had reported the income from her part-time job. The trial court, therefore, erred in computing damages without giving defendant credit for the statutory deductions which the Department is obligated to use when calculating the amount by which earned income decreases the amount of a recipient’s assistance.

Accordingly, the judgment of the circuit court is reversed and the cause is remanded for further proceedings consistent with this opinion.

Reversed and remanded with directions.

SULLIVAN, P. J., and MEJDA, J., concur.


author: JUSTICE MEJDA

text:
    EDWARD ANDERSON, d/b/a A & M Lounge, Plaintiff-Appellant, v. ILLINOIS LIQUOR CONTROL COMMISSION et al., Defendants-Appellees.
    First District (5th Division)
    No. 81-606
    Opinion filed April 16, 1982.

      Murphy & Preston, of Chicago (Lee Preston and James P. Flannery, Jr., of counsel), for appellant.
    Tyrone C. Fahner, Attorney General, of Chicago (Russell C. Grimes, Jr., Assistant Attorney General, of counsel), for appellees.
   JUSTICE MEJDA

delivered the opinion of the court:

The Illinois Liquor Control Commission upheld a local liquor commissioner’s revocation of plaintiff’s liquor license. On administrative review the circuit court affirmed and plaintiff appeals contending that: (1) the Local Liquor Control Commissioner improperly revoked his license due to noncompliance with the notice and hearing requirements of section 5 of article VII of the Liquor Control Act (Ill. Rev. Stat. 1979, ch. 43, par. 149); (2) the commissioner committed abuses warranting reversal; and (3) he was not liable for wrongful acts of an alleged employee, nor was he liable for acts occurring outside the licensed premises.

Plaintiff Anderson owns and operates a tavern, the A & M Lounge, in Waukegan, Illinois. On September 27, 1980, Bill Morris, the Mayor and Local Liquor Control Commissioner of Waukegan, caused plaintiff to be served with a “Notice to Close” ordering the immediate closure of plaintiff’s tavern. The notice stated that there existed sufficient information to believe that the continued operation of the licensed premises constituted an immediate threat to the welfare of the community and was predicated upon charges that certain agents or employees of plaintiff had participated in the sale of controlled substances with plaintiff’s knowledge, in or about the licensed premises. The notice indicated that plaintiff would receive notice of a hearing to be held within seven days. Plaintiff closed his tavern on that date.

On October 1,1980, at 10:51 p.m., plaintiff was served with a “Notice of Charges and Hearing” advising him that the hearing would be held on October 3,1980, at 2 p.m. and enumerating several charges placed against him: that in September 1980 on three separate occasions Officer Herbert Milton purchased a substance represented to be heroin from Carl Banks in or around the premises; that in September 1980 plaintiff told Officer Milton that if he wanted to buy heroin he would have to wait until Carl Banks arrived; that Carl Banks was the employee or agent of plaintiff and had free access and use of the premises for the purpose of selling such substance; and that the above sale of substances represented to be heroin were conducted with the knowledge of plaintiff, and constituted a breach of the peace and a menace to the health, safety and welfare of the public, in violation of sections 24 — 11—3 and 4 — 27(a) of the City of Waukegan ordinances. Waukegan, Ill., Code §§24 — 11—3 and 4 — 27(a) (1960).

On October 3,1980, plaintiffs attorney and the city attorney entered into an agreement whereby the latter would agree to continue the hearing date until October 16, 1980. In return, plaintiff agreed to keep his premises closed until such hearing date. The local commissioner granted the continuance and a hearing was held on October 16,1980.

At this hearing the City of Waukegan produced the testimony of Officer Herbert Milton, a Chicago police officer then assigned to the Federal Drug Enforcement Administration. His testimony largely related to several incidents, occurring during September 1980, which had been cited in the notice of charges. The witness testified that the following incidents took place in or about the A & M Lounge:

(1) On September 4,1980, while working under cover, he purchased four $25 bags of a substance represented by Carl Banks to be heroin outside the lounge.

(2) On September 8, 1980, at about 11 a.m. he had the following conversation with the plaintiff outside of the lounge:

“ ‘I’d like to purchase four of those things I got from you yesterday.’ Mr. Anderson stopped, and he said, ‘What things? What are you talking about?’ I said, ‘Four $25 bags.’ He said ‘$25 bags of what?’ I say [sic] ‘Four $25 bags of heroin.’ Mr. Anderson said, ‘You want to see Carl.’ I said ‘Carl is not here.’ He said, ‘So, you have to wait for him.’ ”

(3) On September 10,1980, he arranged with Carl Banks a purchase of a substance represented by Banks to be heroin while inside the lounge. The delivery of the substance occurred outside of the lounge. On the same date, while sitting at the bar, he and Banks discussed the sale of weapons. Banks indicated that a display could be set up from which the officer could choose from any number of shotguns and handguns.

(4) On September 16, 1980, he arranged a purchase of heroin from Banks while in the lounge.

(5) On September 17,1980, Banks delivered to the officer a substance represented to be heroin in the lounge.

Officer Milton further testified that he saw Banks behind the bar working on a cooler on at least four occasions. However, he stated that anybody could walk behind the bar and that plaintiff had never offered to sell him anything.

In addition, Lieutenant Lawrence Pasquini of the Waukegan Police Department testified that when he arrested Banks on September 27,1980, Banks possessed a key to the A & M Lounge.

Plaintiff testified that he did not give a key to the lounge to Banks and that he had no knowledge that Banks was selling substances purported to be heroin in the lounge. He further stated that Banks did not work for him except when he helped install a cooler.

The local commissioner issued an order on October 17, 1980, revoking the plaintiff’s retail liquor license. The commissioner found that Carl Banks made various sales of substances represented to be heroin in and around the lounge to the undercover officer, and that plaintiff condoned his activities. The local commissioner also found that Banks had sufficient connection with and control of the premises to be considered an agent of the plaintiff. On November 7, 1980, plaintiff appealed to the Illinois Liquor Control Commission, and on November 12,1980, the Commission directed the local commissioner to allow plaintiff to reopen pending appeal. After a hearing on January 7, 1981, the Commission issued its findings of fact and conclusions of law, affirming the order of the local commissioner on January 27,1981. On administrative review, the circuit court affirmed the revocation of plaintiff’s liquor license on March 5,1981.

Opinion

Plaintiff first contends that the local commissioner lacked jurisdiction over the matter since he failed to comply with the three-day written notice requirement of the Illinois Liquor Control Act. (Ill. Rev. Stat. 1979, ch. 43, par. 149.) Section 5 of article VII of this Act provides in pertinent part that:

“The local liquor control commissioner may revoke or suspend any license issued by him ” # ”. However, no such license shall be so revoked or suspended except after a public hearing by the local liquor control commissioner with a 3 day written notice to the licensee affording the licensee an opportunity to appear and defend.” Ill. Rev. Stat. 1979, ch. 43, par. 149.

Initially, we do not agree that the three-day notice requirement is correctly characterized as a jurisdictional matter. The meaning of “jurisdiction” is limited in scope and applies only to the authority to hear and decide a case. (See One Way Liquors, Inc. v. Byrne (1982), 105 Ill. App. 3d 856, 435 N.E.2d 144.) The issue raised is rather one of procedural due process, and thus the inquiry is whether the procedures utilized in the instant case satisfied the statutory requirements of proper notice and hearing with an opportunity to appear and defend prior to the revocation of plaintiff’s liquor license.

From the record there is no showing that plaintiff was not afforded an opportunity to appear and defend at a public hearing. Plaintiff was represented by counsel at each stage of the proceedings. Although the instant notice was served upon plaintiff less than three days before the October 3, 1980, hearing date, only plaintiff’s request for a continuance was considered at this hearing, and no hearing was had with respect to revocation of plaintiff’s liquor license until October 16, 1980. Plaintiff raised no objection to the notice period before the local commissioner, and upon his request for an extension of the hearing period, he was afforded a total of 15 days to prepare his defense. We find that under these procedures plaintiff was not denied due process of law and that the local commissioner was not without authority to proceed in this matter.

Plaintiff next contends that the notice of hearing was not pleaded with the specificity required to satisfy due process. In Illinois a retail liquor license may be revoked if it is determined that the licensee has violated any of the provisions of the Dramshop Act, any valid local ordinance, or any applicable rule or regulation of the State Commission. (Ill. Rev. Stat. 1979, ch. 43, par. 149.) The due process requirements of a definite charge and adequate notice are satisfied when the licensee is fairly and reasonably apprised of the acts of misconduct with which he is charged so that he may properly prepare to defend such charges. (See Goranson v. Department of Registration & Education (1980), 92 Ill. App. 3d 496, 415 N.E.2d 1249.) However, it has been held that where violation of a statute could result in the loss of a licensee’s license, he should be advised with specific citation as to what particular statute, ordinance, or commission rule he was charged with having violated. See Beer & Brat, Inc. v. Illinois Liquor Control Com. (1976), 44 Ill. App. 3d 713,358 N.E.2d 736; Daley v. Resnick (1972), 5 Ill. App. 3d 683, 284 N.E.2d 39.

The instant charges contained detailed factual allegations indicating acts of alleged misconduct occurring at plaintiff’s place of business as well as specific citations to the State statutes and local ordinances plaintiff was charged with having violated. Further, the charges included the dates of the alleged misconduct and referred to the names of witnesses supporting the charges. This is not a situation where plaintiff did not have an opportunity to prepare his defense. Moreover, we do not agree that the complaint merely charged plaintiff with creating a breach of the peace and with not being of good reputation and character. The charges cited section 24 — 11—3 of the City of Waukegan Code, which specifically provides for revocation or suspension of a license when the licensed activity is conducted “in such a manner as to constitute a breach of the peace, or a menace to the health, safety or welfare of the public, * e (Emphasis added.) (Waukegan, Ill., Code §24 — 11—3 (I960).) We find that the complaint herein satisfies the requirements of due process.

Plaintiff next asserts that the seven-day closing of his place of business by the local commissioner was abusive to the point of warranting reversal. Article VII, section 5 of the Liquor Control Act gives a local commissioner the power to close a licensed premises without a prior hearing for seven days when he “has reason to believe that any continued operation * * * will immediately threaten the welfare of the community * ” (Ill. Rev. Stat. 1979, ch. 43, par. 149.) We reject plaintiffs unsupported argument that this type of closure would be appropriate only at a time of civil unrest or natural disorder. The illogic of this assertion is manifest in that the seven-day closure is not applicable to other businesses conducted by the licensee on the licensed premises. In any case the written order of closure here complied with the procedural requirements of section 5. From the record we cannot hold that the local commissioner, when confronted with information that the A & M Lounge was being used for the sale of substances represented to be heroin, erred in concluding that an immediate threat to the welfare of the community existed by the continued operation of the plaintiff’s place of business. In light of the evidence we feel that the local commissioner did not abuse his discretion by issuing the notice to close.

The plaintiff further argues that the local commissioner abused his discretion by refusing to allow him to reopen the premises after seven days. Although section 5 provides that the licensed premises may be closed for not more than seven days without notice or hearing (Ill. Rev. Stat. 1979, ch. 43, par. 149), the instant record shows that plaintiff was given an opportunity to be heard within seven days at the October 3, 1980, hearing, and that he asked for a continuance until October 16,1980, voluntarily agreeing to remain closed until that date. In our view the extended closure period was not attributable to any alleged abuses by the local commissioner, but rather resulted from the plaintiff’s voluntary agreement to remain closed until the October 16 hearing date.

Plaintiff next raises several issues in which he challenges the sufficiency of the evidence to support the commissioner’s decision. He contends that Carl Banks was not his employee at the time of the alleged wrongdoing, and that even if he was an employee, the licensee is not liable for acts of an off-duty employee. He also argues that the alleged unlawful action of Carl Banks occurred outside of the licenséd premises, and that the licensee cannot be held liable for such acts unless there is proof that Carl Banks was working for him at the time he committed the acts.

The role of the court upon administrative review is to determine whether the findings of the commissioner are contrary to the manifest weight of the evidence (Jager v. Illinois Liquor Control Com. (1979), 74 Ill. App. 3d 33, 392 N.E.2d 176), and the courts cannot reweigh the evidence or make an independent determination of the facts. (Kenessey Enterprises, Inc. v. Illinois Liquor Control Com. (1978), 63 Ill. App. 3d 975, 380 N.E.2d 996.) Although the licensee generally cannot be held liable for conduct over which he has no control (Jager; Beer & Brat, Inc. v. Illinois Liquor Control Com. (1976), 44 Ill. App. 3d 713, 358 N.E.2d 736), article X, section 3 of the Dramshop Act provides that acts done by any agent or employee constituting a violation of the Act are deemed to be the acts of the employer or licensee as if said acts had been done by him personally. (Ill. Rev. Stat. 1979, ch. 43, par. 185.) The commissioner concluded that Carl Banks had sufficient connection and control of the premises to be considered an agent of the licensee. The evidence revealed that Banks was seen behind the bar on four occasions by Officer Milton, and that when arrested he possessed a key to the premises. Additionally, it was adduced that plaintiff told Officer Milton that he would have to wait for Banks to arrive in response to Officer Milton’s inquiry regarding the purchase of heroin. The evidence shows that the commissioner’s orders and finding were not against the manifest weight of the evidence.

Plaintiff argues that he is not liable for acts occurring outside the licensed premises. The evidence adduced at the hearing showed that the September 17, 1980, delivery of heroin occurred inside the lounge. From the record we cannot say that the plaintiff was charged with conduct over which he had no control. Based on the September 8, 1980, conversation between plaintiff and Officer Milton, the commissioner could reasonably conclude that plaintiff was aware of and permitted the activities of Carl Banks. We find that the decision of the local commissioner is supported by substantial evidence and is neither arbitrary nor contrary to the manifest weight of the evidence.

For the foregoing reasons, the judgment of the circuit court upholding the Commission’s decision is affirmed.

Affirmed.

SULLIVAN, P. J., and WILSON, J., concur.


author: PRESIDING JUSTICE SULLIVAN

text:
    LILLIAN TUPY, Clerk of the Village of Bridgeview, Plaintiff-Appellant and Cross-Appellee, v. JOHN A. OREMUS, President of the Village of Bridgeview, et al., Defendants-Appellees and Cross-Appellants.
    First District (5th Division)
    No. 81-1163
    Opinion filed April 16, 1982.

      Burton S. Odelson and Mark H. Sterk, both of Evergreen Park, for appellant.
    Marvin J. Clink and Katherine S. Janega, both of Ancel, Clink, Diamond, Murphy & Cope, P. C., of Chicago, for appellees.
   PRESIDING JUSTICE SULLIVAN

delivered the opinion of the court:

Plaintiff appeals from two orders of the trial court disposing of her three-count petition for mandamus, declaratory judgment, injunctive and other relief. Defendants also appeal from portions of both orders. Plaintiff here contends that (1) under an ordinance of the village of Bridgeview (village), she is entitled to serve as village collector by virtue of her election as village clerk; and (2) certain village salary ordinances are unconstitutional, as they were passed and took effect during defendant officials’ same terms of office, so that payments made thereunder must be returned. Defendants contend that (1) the trial court erred (a) in not granting their motion to dismiss plaintiff’s taxpayer action for failure to comply with statutory requirements and (b) in finding that one salary increase was void and in not ruling on the validity of earlier salary increases; and (2) plaintiff is not entitled to attorney fees.

Plaintiff alleged in counts I and II of her amended petition that she was elected village clerk on April 17,1979, and took office on May 9,1979; that on May 10,1979, village president Oremus announced that the village treasurer had been assigned the duties of village collector, which duties the village clerk had performed in the past; that she had assumed the duties of village collector since her election, and only she and her deputy clerk knew how to perform certain functions of the collector’s office; that defendants transferred the clerk’s staff from her control in June 1979; and that defendants’ actions were intended to intimidate her into resigning. Count I sought a writ of mandamus directing defendants to pay plaintiff the collector’s salary of $8,500 for each of the four years of her term, as purportedly established by village ordinance; to reinstate the employees under her supervision and award attorney fees. Count II sought, inter alia, a declaratory judgment that under a village ordinance, plaintiff through election as village clerk was entitled to serve as village collector, with the “salary and emoluments” of that office, for a 4-year term expiring April 30,1983, as previously established by the village authorities.

Count III of the amended petition was brought as a taxpayer action on behalf of plaintiff, all other village taxpayers, and the village, challenging a 1975 salary increase ordinance for the village president and liquor control commissioner and a similar 1979 ordinance for those offices and three trustees elected that year. Relative to that count, it appears that on April 15, 1975, Oremus was re-elected village president, and on April 24, 1975, at the first regular board meeting following the election, the village board of trustees (Board) amended the ordinance pertaining to the salary of village officials by increasing the salaries of both the president and liquor control commissioner from $1,500 under the prior ordinance to $2,500, the ordinance to become “effective commencing with the next term of office of the Village President, Village Clerk and the Village Trustees.” (Bridgeview, Ill., Code of Ordinances, Ordinance 75-18 (1975).) At the same meeting, the Board adopted by ordinance the annual village budget for the year beginning May 1, 1975, and ending April 30, 1976. That ordinance reflected the prior salary level at $1,500 per year through April 30, 1975, followed by the increase to $2,500 effective May 1, 1975. (Bridgeview, Ill., Code of Ordinances, Ordinance 75-17 (1975).) The Board then adjourned sine die, after which the meeting was reconvened and newly elected officials were sworn into office.

It further appears that on April 17, 1979, Oremus was re-elected village president, Slaninka was re-elected trustee, and Malinowski and Burrow were newly-elected trustees. On April 26, 1979, the Board adopted Ordinance 79-14, which increased the salaries of the village president and liquor control commissioner to $3,500 each per year and the compensation of trustees taking office after May 1,1979, from $75 to $100 per meeting, and further provided that the specified increases were to become “effective commencing with the next term of office of the Village President and the Village Trustees.” (Bridgeview, Ill., Code of Ordinances, Ordinance 79-14 (1979).) That same day, the Board also adopted Ordinance Nó. 79-15, which was the annual village budget for the year commencing May 1, 1979, and ending April 30, 1980. (Bridgeview, Ill., Code of Ordinances, Ordinance 79-15 (1979).) The officials elected on April 17, 1979, were sworn in at the board meeting on May 3, 1979.

Alleging that the 1975 and 1979 salary increases were void because they were enacted after the elections, in violation of State law (Ill. Const. 1970, art. VII, §9(b); Ill. Rev. Stat. 1975, ch. 24, par. 3 — 13—1; Ill. Rev. Stat. 1979, ch. 24, par. 3 — 13—1), plaintiff sought an accounting of the money paid to defendants, an order directing defendants to repay the amount owed the village, an injunction barring defendants from receiving any salary increases based on ordinances adopted after election to their respective offices, and attorney fees. On August 21, 1980, the trial court dismissed counts I and II with prejudice and struck count III with leave to amend. On December 2, 1980, following plaintiff’s motion to vacate, the trial court ordered that counts I and II be dismissed with prejudice and that plaintiff receive the salary appropriate for village collector, pro rata from the date she assumed office until May 10, 1979, when the duties of collector were assigned to the village treasurer, and it denied defendants’ motion to dismiss count III. On April 14, 1981, following motions for summary judgment by both parties as to count III, the trial court entered an order, inter alia, allowing the 1975 salary increases to stand; declaring the 1979 salary increases void as they pertained to village officials elected in April 1979; granting prospective relief only; reserving the question of attorney fees; and staying the order pending appeal.

From the orders of December 2,1980, and April 14,1981, the parties appeal.

Opinion

We first consider plaintiff’s contention that the trial court erred in dismissing counts I and II of her amended complaint. Plaintiff argues that under the facts alleged, she is entitled to the position of village collector by virtue of being elected village clerk in accordance with Dumke v. Anderson (1976), 44 Ill. App. 3d 626, 358 N.E.2d 344. We believe, however, that plaintiff cannot rely on the holding of Dumke to state a cause of action under counts I and II, since the facts in Dumke are distinguishable.

In Dumke, a village president and village clerk brought an action to prevent the abolition, by ordinance, of the office of village collector or the reduction of its salary. The clerk had been re-elected in April 1973 to a 4-year term ending April 30, 1977. The clerk also held the office of collector under an ordinance which provided:

“ ‘Pursuant to the authority vested unto the village by the Illinois Revised Statutes, Chapter 24, Section 3 — 8—3, providing that where the village collector is appointed, the village clerk may hold said office of village collector, it is hereby made and provided for that the village clerk shall hold the office of village collector.’ ” (44 Ill. App. 3d 626, 628, 358 N.E.2d 344, 346-47.)

Midway through the term of the purported clerk-collector, the village board sought to reduce the salary of the collector from $18,120 per year to $1 per year and instructed the village attorney to prepare an ordinance abolishing the office of collector effective at the end of fiscal year 1975, more than two years before the expiration of his term. In finding that the office of collector could not, under those facts, be abolished or its salary reduced, the court held that sections 3 — 8—3 and 3 — 13—11 of the Illinois Municipal Code (Ill. Rev. Stat. 1971, ch 24, pars. 3 — 8—3, 3 — 13—11) did not permit the offices of clerk and collector to be combined but rather that one person could hold both the elective office of clerk and the appointive office of collector. Focusing upon the nature of the appointing power under section 3 — 8—3 of chapter 24, the court further stated that such power had been placed in the hands of the electorate under the ordinance in question, and thus, when the electorate cast their votes for the office of clerk, they also decided who was to be collector for the 4-year term. Accordingly, the clerk’s and the collector’s terms of office were co-extensive. We are of the view, therefore, that Dumke stands for the proposition that where the choice of collector is entrusted by ordinance to the electorate through their choice for clerk, the office of collector may not be abolished or its salary reduced during the term of the incumbent clerk.

In the present case, by contrast, the appointing power is not reserved to the electorate. Section 1 — 7—10 of the Code of Ordinances (Bridgeview, Ill., Code of Ordinances, section 1 — 7—10 (1979)) provides:

“EX-OFFICIO COLLECTOR: The Clerk shall act as and perform all duties of collector unless and until a separate collector is appointed.”

Initially, we note that section 1 — 7—10 is authorized under section 3 — 8—3 of the Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 3 — 8—3), which provides in relevant part:

“If, in any village a village collector is appointed, the village board may provide by ordinance that the village clerk shall hold the office of village collector.”

Thus, it is within the power of the appropriate municipal authorities to appoint a collector and to designate, by ordinance, that the village clerk shall hold that office.

We think it clear that, unlike Dumke, the ordinance here does not transfer the appointing power to the electorate. Such power remains instead with the village president, by and with the advice and consent of the Board (Ill. Rev. Stat. 1979, ch. 24, par. 3 — 8—1), and plaintiff does not assert here that such consent was not secured.

Accordingly, we hold that the trial court did not err in finding that plaintiff failed to allege either a legal right to the position of village collector or any cognizable injury resulting from the transfer of the collector’s duties to the treasurer. Absent such allegations, plaintiff failed to state a cause of action for mandamus under count I and likewise failed to demonstrate, under count II, her right to a declaration that she is entitled to the position of village collector. See Hoskins v. Abbott (1977), 69 Ill. 2d 20, 370 N.E.2d 514; Thornton, Ltd. v. Rosewell (1977), 51 Ill. App. 3d 373, 366 N.E.2d 418, aff'd (1978), 72 Ill. 2d 399, 381 N.E.2d 249; People ex rel. Endicott v. Huddleston (1975), 34 Ill. App. 3d 799, 340 N.E.2d 662.

We turn next to the validity of the 1975 and 1979 salary increase ordinances. Preliminary to examination of the ordinances themselves is defendants’ contention that count III, in which plaintiff attacked the ordinances, should have been dismissed. They maintain that inasmuch as plaintiff failed to comply with the requirement of filing a bond under section 1 — 5—1 of the Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 1 — 5—1) and as count III contains no factual allegations that any payments had been made “without authority of law,” she cannot maintain the suit.

Section 1 — 5—1 provides:

“A suit may be brought by any taxpayer, in the name and for the benefit of the municipality, against any person to recover any money of property belonging to the municipality, or for any money which may have been paid, expended, or released without authority of law. But such taxpayer shall file a bond for all costs, and shall be liable for all costs in case the municipality is defeated in the suit, and judgment shall be rendered accordingly.”

Contrary to defendants’ position, we believe that section 1 — 5—1 does not require the filing of a bond as a precondition to the bringing of the action.

In essence, plaintiff’s count III is an action to recover money allegedly belonging to the municipality and to enjoin improper disposition thereof. Generally, the condition precedent to the maintenance of such a taxpayer action is to make a demand on the proper public official to bring suit in the name of and on behalf of the municipality unless it is shown that such demand would be useless. (Metropolitan Sanitary District ex rel. O’Keeffe v. Ingram Corp. (1981), 85 Ill. 2d 458, 426 N.E.2d 860; People ex rel. City of Chicago v. Schreiber (1944), 322 Ill. App. 452, 54 N.E.2d 862.) Significantly, defendants do not contend that plaintiff failed to make such demand or that, had such demand been made, it would not have been futile. Moreover, it has been held that the court may permit the filing of a bond in a taxpayer action nunc pro tunc. (Cascione v. Morris (1963), 243 N.Y.S.2d 67,40 Misc. 2d 431; Shaw v. Topping (1955), 142 N.Y.S.2d 490.) Also, as fully explained below, we believe count III states a cause of action to recover payments made without authority of law. Accordingly, we reject the contention that count III should have been dismissed.

With respect to the ordinances, defendants contend that they are entitled to summary judgment as to count III because the trial court erred in refusing to uphold the validity of the 1975 salary increases and in holding the 1979 increases to be invalid. They maintain that the salary increases in both years were valid, as they were enacted before the new terms of office began, and three arguments are advanced in support of that position. They posit, first of all, that despite the absence of any express provision fixing the beginning of their term of office, a reading of the village’s ordinances as a whole demonstrates that the term for both elected and appointed officials commenced on May 1, following their election. Secondly, they assert that the salary increases were properly enacted after the election and before the purportedly new term of office began on May 1. Finally, they argue in the alternative that even if the new term did not commence on May 1, the salary increases were nevertheless valid since, in the absence of a constitutional or statutory provision setting the date on which the term of office of an elected official begins, such term commences when the official qualifies for office. Having considered defendants’ arguments, we find that the trial court did not err.

Constitutional and statutory limitations are placed on the power to establish the compensation of municipal officers. The Constitution (Ill. Const. 1970, art. VII, §9(b)) provides:

“An increase or decrease in the salary of an elected official of any unit of local government shall not take effect during the term for which that officer is elected.”

Similarly, the Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 3 — 13—1) provides in relevant part:

“All municipal officers, except as otherwise provided, shall receive the salary, fees, or other compensation that is fixed by ordinance. After they are once fixed, these salaries, fees, or other compensation shall not be increased or diminished, so as to take effect during the term of any elected municipal officer. The salaries, fees or other compensation of any appointed municipal officer, not including those appointed to fill vacancies in elective offices, may be increased but not diminished so as to take effect during the term for which such officer was appointed.”

Thus, the salaries of elected municipal officials may not be increased to take effect during the term for which the officials were elected. It is conceded in the present case that no single provision of the Constitution or of a statute or ordinance in effect at the time fixed a beginning date for the term of office of defendants. Therefore, a determination of when the terms of office began is the threshold question we must address in establishing the propriety of the salary increases.

In taking the position that the village ordinances, as a whole, fix May 1 as the beginning of the term, defendants rely on Winokur v. Bakalis (1980), 84 Ill. App. 3d 922, 405 N.E.2d 1329. In that case, two State statutes increasing the salaries of members of the General Assembly were enacted after the general election of November 7, 1978, to take effect on November 29,1978, and January 7,1979. While neither statute referred to a beginning date for the legislators’ terms of office, the court found the term commenced on January 10, 1979, the date the legislature began its business following the general election in which the legislators were elected. It was held that a provision of the Constitution (Ill. Const. 1970, art. IV, §11), requiring that salary changes for the General Assembly not take effect during the term for which its members were elected, prohibits a salary increase from taking effect during the term in which such statute is enacted. The court also held that the same constitutional provision does not prohibit legislative salary changes from taking effect during the term for which members have been elected, where such members have not taken office as of the date the salary increase is enacted. (Also see Foreman v. People ex rel. McEwen (1904), 209 Ill. 567, 71 N.E. 35.) Significantly, however, in finding that the term of the General Assembly began on January 10,1979, the court in Bakalis implicitly relied upon the constitutional provision that the “General Assembly shall convene each year on the second Wednesday of January” (Ill. Const. 1970, art. IV, §5(a)) as fixing the term of office of legislators elected in November 1978 on the second Wednesday of January 1979, and the court expressly stated that there was no issue as to the beginning of the term of office. We think it clear, therefore, that the Bakalis court drew its finding as to the beginning of the legislature’s term solely from the above quoted language of the Constitution. Accordingly, defendants’ position is not supported by Bakalis, and we do not accept May 1 as the beginning of the term of defendant trustees’ term of office on that basis.

It follows from our rejection of the May 1 starting date that defendants’ second premise, dependent as it is upon the first, is likewise invalid. Nevertheless, they assert in this regard that the salary ordinances were properly enacted in the interim between the elections of 1975 and 1979 and the purported beginnings of the terms on May 1. While it is true, as defendants point out, that in order for a salary increase to be valid an election need not intervene between the enactment of such increase and its effective date (Winokur v. Rosewell (1980), 83 Ill. 2d 92, 414 N.E.2d 724; Foreman v. People ex rel. McEwen (1904), 209 Ill. 567, 71 N.E. 35; Winokur v. Bakalis (1980), 84 Ill. App. 3d 922, 405 N.E.2d 1329), those cases, upon which they rely, however, are inapposite because in each the term of office commenced on a fixed date. Thus, the applicability of those cases depends upon our acceptance of May 1 as the beginning of the terms in question, which view we do not endorse.

As to the alternative grounds that the term commences when the official qualifies for office, defendants rely upon People ex rel. Evans v. Callaghan (1876), 83 Ill. 128. That case involved a section of the Township Organization Act then in effect, which was construed as providing that a village collector’s term of office began when he took the required oath within 10 days of election. Taking such oath in the manner prescribed by the Constitution of 1870 was required of every elected or appointed town official, and neglecting to do so was deemed a refusal to serve, in which case the office could be regarded as vacant. Defendants contend that Callaghan governs because section 3 — 2—6 of chapter 24 requires officials to qualify within 10 days after notice of election or appointment (Ill. Rev. Stat. 1979, ch. 24, par. 3 — 2—6); that under Callaghan their terms began when they took the oath; and that since the taking of the oath followed enactment of the salary ordinances, the increases were valid, as they did not take effect during the term in which such ordinances were enacted.

In our view, however, the question of when the term commenced as well as the applicability of Callaghan is resolved by People ex rel. Holdom v. Sweitzer (1917), 280 Ill. 436, 117 N.E. 625. There, the general rule was stated to be that if no time is fixed by constitution or statute for the beginning and ending dates of a term of office, it begins, in the case of elected officials, on the date of the election. (Also see People ex rel. Sullivan v. Powell (1966), 35 Ill. 2d 19, 217 N.E.2d 806; People v. Rezek (1951) , 410 Ill. 618, 103 N.E. 127, cert. denied sub nom. May v. Illinois (1952) , 343 U.S. 965, 96 L. Ed. 1362, 72 S. Ct. 1059; State ex rel. Sanchez v. Dixon (La. App. 1941), 4 So. 2d 591; Marshall v. Harwood (1854), 5 Md. 423; State ex rel. Brown v. Constable (1835), 7 Ohio 7.) Thus, in Sweitzer, it appeared that no time was fixed for the commencement of the term of certain judges, but the date of the election and the length of their term were fixed. Similarly, in the present case, the beginning of the term of defendant officials was not fixed, but the date of their election in 1975 and 1979 and the length of their terms were. Accordingly, it is our belief that the rule of Sweitzer applies, so that defendants’ terms of office began on the dates they were elected. Consequently, the salary increase ordinances of 1975 and 1979 were adopted after their terms had begun and are, therefore, in violation of the Constitution (Ill. Const. 1970, art. VII, §9(b)) and the Municipal Code (Ill. Rev. Stat. 1979, ch. 24, par. 3 — 13—1).

We also think it significant that the Sweitzer court carefully distinguished Callaghan, stating that while the term of office as fixed by law is sometimes understood to be synonymous with the terms or time of occupancy of the incumbent, the two concepts are entirely different. In this regard, the Sweitzer court pointed out that an officeholder’s term, by which is meant his time of holding office, does not commence until he qualifies by taking the oath of office, where required, or by giving his oath and bond where both are required. An officer, in the court’s view, who had not so qualified, would not be entitled to draw his salary and perform his official duties. Thus, in light of Sweitzer, we believe that, unlike the circumstances presented here, Callaghan applies to determine the time of an incumbent’s occupancy of office and not when the term of office, as fixed by law, commences. Therefore, as defendants’ reliance upon Callaghan shifts ground in middebate, it is misplaced.

As a consequence of our finding that the salary increase ordinances are invalid, we must determine whether the trial court correctly ruled that its order was to operate prospectively. Plaintiff contends that where a taxpayer, as here, successfully challenges disbursements made by public officials under a void ordinance, that money must be returned.

In support of its position, plaintiff cites numerous authorities. We find it unnecessary to discuss them in detail, however, and we note that as all are factually distinguishable, they are unavailing.

In the order of April 14, 1981, the trial court ruled that the salary increases under the 1979 ordinance were void to the extent they pertained to officials elected in April 1979. The court did not rule on the validity of the 1975 ordinance, finding that the money paid to defendants thereunder had been spent and that the ordinance had expired along with the terms of office which it affected. The record further indicates that plaintiff is familiar with the operation of the village, including its appropriation ordinances, having served as deputy clerk and deputy collector for 13 years prior to her election as village clerk. Plaintiff did not, however, challenge the salary increases until the present dispute arose over the office of village collector. Thus, it appears that plaintiff knew of the practices of the village but did not challenge the salary increases until she herself was dissatisfied with her status as a village official and that she made no attempt to prevent further prejudice to defendants except for a motion to segregate funds, on which she only requested that it be generally continued. In the light of those facts, we believe the trial court properly granted prospective relief.

Finally, although the trial court did not rule on plaintiff’s request for attorney fees, in order to bring this matter to conclusion, we consider her entitlement thereto. In this regard, we note that while the conduct of defendants in enacting the salary increase ordinances was illegal, “the considerations that have supported the ‘elementary rule’ that members of a municipal legislative body are not personally liable for their legislative acts [citation] remain applicable here.” (Pechous v. Slawko (1976), 64 Ill. 2d 576, 593, 357 N.E.2d 1144, 1153-54; also see Dumke v. Anderson (1976), 44 Ill. App. 3d 626, 358 N.E.2d 344.) There being no ground for placing the burden of attorney fees on the taxpayers of the village, plaintiff’s request should have been denied, and this matter will be remanded for the entry of such an order.

For the reasons stated, the judgment is affirmed, and this matter is remanded with direction to enter an order denying attorney fees to plaintiff..

Affirmed and remanded with direction.

LORENZ and WILSON, JJ., concur.


author: PRESIDING JUSTICE CAMPBELL

text:
    JOHN N. PRZYBYL, Plaintiff-Appellant, v. CHELSEA MOTOR INN et al., Defendants-Appellees.
    First District (1st Division)
    No. 81-46
    Opinion filed April 19, 1982.
    P. Scott Polisky, of Burditt and Calkins, of Chicago, for appellant.
    David M. Zerante, of Serpico, Novelle, Dvorak & Navigato, Ltd., of Chicago, for appellees.
   PRESIDING JUSTICE CAMPBELL

delivered the opinion of the court:

Plaintiff, John N. Przybyl, instituted this action against Chelsea Motor Inn, George Samatas and William Dimas under a theory of respondeat superior for injuries arising out of an automobile accident involving an employee of Chelsea Motor Inn. Defendants Samatas and Dimas filed a motion to dismiss them as defendants from this lawsuit alleging that they are shareholders of Acme Corporation, an Illinois corporation which owned and operated Chelsea Motor Inn, and as such are not personally liable for the alleged negligence of a corporate employee. The trial court granted defendants’ motion to dismiss and plaintiff appeals. The issue presented on appeal is whether a corporation’s unauthorized use of an assumed name will result in personal liability of the shareholders for the alleged negligence of a corporate employee.

For the reasons set forth herein, we affirm.

The record discloses that plaintiff seeks to recover damages for personal injuries resulting from the alleged negligent operation of an automobile by an employee of Chelsea Motor Inn, one Nexibuden Sejdini, who was not made a party to this action. Plaintiff attached to his complaint an affidavit by Sejdini in which Sejdini stated that he worked for Chelsea and that he believed that Samatas owned Chelsea. Prior to filing their motion to dismiss, defendants Samatas and Dimas informed plaintiff that they were shareholders of Acme Corporation which owned and operated Chelsea Motor Inn at the time of the accident and that they personally did not employ Sejdini. The trial court allowed plaintiff to add Acme Corporation as a defendant.

The record also reveals that Acme never registered the assumed name “Chelsea Motor Inn” with the office of the county clerk, nor did Acme file the appropriate documents with the Secretary of State to change its corporate name to “Chelsea Motor Inn.” At the time that this cause of action arose, a corporation which advertised its business under any name other than its corporate name or a name it was authorized to use by law was subject to criminal sanctions. Ill. Rev. Stat. 1977, ch. 32, par. 211.1.

At the hearing on the motion to dismiss, and again before this court, plaintiff contends that Acme Corporation’s use of an unauthorized assumed name, which caused plaintiff’s inability to identify the entity that in fact own and operate the business of Chelsea, should result in its shareholders being held personally liable for the tortious acts of a corporate employee. Plaintiff relies upon Maxwell v. Eureka Mutual Benefit Corp. (1931), 262 Ill. App. 342, for the proposition that the use of an unauthorized assumed name by a corporation constitutes abandonment, not only of the corporate name, but also of the corporate status. Plaintiff also argues that in Anzalone v. Durchslag (1971), 1 Ill. App. 3d 125, 273 N.E.2d 752, the transaction of business under an unauthorized assumed name led the court to pierce the corporate veil and hold the shareholders personally liable for corporate debts.

Defendants Samatas and Dimas urge that the granting of their motion to dismiss was proper since a shareholder of a corporation is insulated from personal liability for the tortious acts of the corporation and its employees in which he does not participate. (Fure v. Sherman Hospital (1977), 55 Ill. App. 3d 572, 371 N.E.2d 143.) They contend that under Pilsen Brewing Co. v. Wallace (1919), 291 Ill. 59, 125 N.E. 714, the use of an unauthorized assumed name, though illegal, will not subject the shareholders to personal liability when fraudulent intentions or consequences are not attendant. Defendants argue that Maxwell and Anzalone can be distinguished on the facts and do not support the extension of liability to shareholders in the situation at bar. We agree.

In Maxwell, the defendant corporation attempted to avoid its contractual obligations to plaintiff by claiming that it had procured a new charter under a new name and, therefore, was not the same corporation. It never had used the new name, however, and had continued to use the old name in all of its business transactions. The court held that the new corporation was abandoned and had no more than a paper existence as an unaccepted charter.

In Anzalone the court found that the defendants had led the plaintiff to believe that they were forming a new company or a new partnership. In fact, the new business was only a subsidiary of a corporation with whom the plaintiff previously had dealt. The plaintiff had known the defendants for 25 years and made substantial sales on credit to the new company. The court held the defendants as partners liable for the new business debts, rather than the parent corporation, because the evidence showed that the plaintiff extended credit to the new business in reliance upon the defendants’ representations that they were involved with this new entity.

Neither Maxwell nor Anzalone support plaintiff’s argument that a corporation’s use of an unauthorized assumed name results in shareholder liability for the alleged negligence of a corporate employee in the operation of an automobile. Moreover, plaintiff has not cited any additional authority to support his claims. A shareholder is not vicariously liable for the negligence of a corporate employee (Fure v. Sherman Hospital), and plaintiff has not alleged any fraud or misrepresentation by defendants which would create an exception to this basic rule of corporate law.

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

Judgment affirmed.

GOLDBERG and O’CONNOR, JJ., concur.