author: MR. PRESIDING JUSTICE SULLIVAN

text:
    Arthur S. Bluestein, Plaintiff-Appellant, v. Irwin J. Davis, et al., South Side Bank and Trust Co., Reserve Insurance Company, a Corporation, Defendants-Appellees.
    Gen. No. 50,923.
    First District, Third Division.
    May 11, 1967.
    Rehearing denied July 18,1967.

      I. Harvey Levinson and Melvin E. Levinson, of Chicago (Melvin E. Levinson, of counsel), for appellant.
    George J. Anos and Joseph Ash, of Chicago (Leonard Malkin of counsel), for appellees, Harold J. Green and South Side Bank & Trust Company.
   MR. PRESIDING JUSTICE SULLIVAN

delivered the opinion of the court.

This is an appeal from a decree dismissing plaintiff’s complaint, (a creditor’s bill) for want of equity and assessing all costs against plaintiff.

Plaintiff is a judgment creditor of defendant, Davis. The debt arose out of legal services rendered and money loaned by plaintiff to Davis. By his creditor’s bill plaintiff seeks to reach and apply to the satisfaction of the judgment moneys due to Davis by virtue of a partnership of Davis and defendant, Green, which moneys may have come into the hands of defendant, South Side Bank and Trust Company, (Bank).

Plaintiff contends on appeal that (1) the partnership of Davis and Green was not illegal and that, even if it were, that defense would not be available to Green and/or the Bank; (2) Green should be made to account for the profits of Merit Insurance Agency, and (3) he (Bluestein) is entitled to recover Davis’ share of the City Wide profits from the Bank.

On November 13, 1952, Davis, then operator of Liberal Motors Corporation, a used car dealership, formed City Wide Insurance Agency, a partnership with Green, for the purpose of “carrying on of the business of insurance brokers.” It should be noted that Liberal Motors was financed by defendant Bank, and that Green was the owner of ninety-five percent of the Bank’s stock. Under the partnership agreement Green was to secure all of the insurance and Davis was to run the business aspects of the venture. The business was operated from Liberal Motors’ offices. City Wide’s only source of business was the Bank. It wrote insurance on automobiles on which the Bank held chattel mortgages and in which the Bank was named as a “loss payee.” All of its policies were placed with Reserve Insurance Company, with which Green, doing business as City Wide Insurance Agency, held an agency agreement.

Green was a licensed insurance broker but Davis had no such license. There is a conflict in testimony as to whether Green had requested that Davis procure a broker’s license, but the partnership agreement did not require him to do so.

City Wide’s income was derived from premiums paid to Reserve. Eighty-five percent of the premiums paid in were credited to City Wide but held by Reserve against claims payable. The difference between the eighty-five percent and the losses paid was the net commission earned by the partnership. Fifteen percent was Reserve’s charge for issuing the policies.

Davis at that time was also operating Liberal Motors. However, sometime in November or December of 1953, according to Davis’ testimony, he experienced financial difficulty because the Bank was requiring that he buy back all defaulted automobiles at full contract price, although he was under no legal obligation to do so. When he complained of this to Green, he was told that was the only way the Bank would do business. Thereafter Davis closed Liberal Motors, claiming that the Bank discontinued his line of credit.

Once Liberal Motors ceased operations, City Wide was left without an office. Davis then turned over the City Wide books and records to the Bank. The Bank used two of its employees to service the outstanding policies on about three thousand automobiles, until those policies expired. City Wide issued no new policies thereafter, and the insurance business of the Bank was transferred to Green, doing business as Merit Insurance Agency. When the records were turned over to the Bank, City Wide had a deficit of twenty-five thousand dollars ($25,000), but by June of 1956, when the last policy expired, there had accrued net profits of $8,429.17 in the City Wide account.

In September, 1953, Davis was indebted to plaintiff in the amount of $13,252, for which amount he gave plaintiff an assignment of any moneys due him from the partnership. On July 26, 1954, plaintiff recovered a judgment against Davis in the amount of $14,511.66; execution was returned no property found. The Bank introduced evidence that Davis, when he obtained financing for Liberal Motors, orally pledged his share of City Wide’s profits as extra collateral for the Liberal Motors’ loan. Richard P. Larsen, president of the Bank, testified that in November, 1953, Davis stated that his interest in the profits could be used to defray the Bank’s expenses in liquidating City Wide. Davis also was indebted to the Bank on personal promissory notes.

Plaintiff first contends that the partnership of Green and Davis was not illegal and that, even if it were, that defense would not be available to Green and/or the Bank. The question of illegality arises because Davis was at no time a licensed insurance broker. The Illinois Insurance Code (Ill Rev Stats 1957, c 73), and the Municipal Code of Chicago (c 113) regulate the business of insurance. Among other things, these acts seek to protect the general public from unqualified and/or unscrupulous insurance salesmen. Section 489 of the Illinois act provides:

“This article shall apply to all agents, brokers and solicitors as may be defined herein.”

Brokers are defined in section 490 as:

“Any person, partnership, association or corporation, who or which acts or aids in any manner in the solicitation or negotiation, for or on behalf of the assured, with or without compensation, of policies or contracts for insurance covering property or risks in this State of the kinds enumerated in Section 4.”

Section 492 provides in part:

“No person, partnership, association or corporation shall act as an agent, broker or solicitor without first procuring a license so to act from the Director.”

Further, section 493 provides in part:

“Money, commission or brokerage or allowance of anything of value, including service fees, for or on account of solicitation, negotiation or effecting of policies or contracts for insurance of the kind or kinds enumerated in Section 4 on property or risks in this State may be paid:
“(1) By a company only to its duly licensed agent or to a duly licensed broker;
(2) By an agent only to his duly licensed solicitor or to a duly licensed agent for the same company acting under his direct supervision, or to a duly licensed broker;
“(3) By a broker only to his duly licensed solicitor or to a duly licensed broker.”

The Municipal Code (c 113, §§ 9, 10 and 14) is similar in language, denotation and spirit.

It is plaintiff’s contention that the City Wide arrangement did not violate the language nor the spirit of the Codes. It was shown that Davis in no way solicited or negotiated the policies; rather he handled the clerical and managerial ends of the business. It is further claimed that he was not to receive commissions but only the net profits of the operation. Due to those facts, it is claimed that he came within section 491 of the Illinois Insurance Code, which reads in part:

“This article shall not apply to the following:
U
“(3) Employees engaged solely and exclusively in office duties and not engaged in solicitation or effecting of insurance for any company, agent or broker;
it
“(5) Officers of companies engaged in the performance of their usual customary executive duties who are not individually engaged in the solicitation or negotiation of policies or contracts for insurance.”

Plaintiff’s point is well taken. Although defendants cite several cases in support of their position that the partnership was illegal, those cases all involved persons seeking recovery for services prohibited by the statutes in question. That is, these plaintiffs had actually acted in the capacity prohibited unless licensed. In the instant case Davis never acted as a broker nor held himself out to the public as one. The partnership agreement provided that Green was to perform all the brokerage acts. It further provided that Davis was to receive not commissions, but net profits. The agency contract with Reserve was in Green’s name only, and, since all of City Wide’s business was with Reserve, it was only Green who solicited and placed the policies.

Having determined that the partnership was not illegal, it is unnecessary to discuss the question of whether a defense of illegality is available to Green or the Bank.

Plaintiff next contends that Green should be made to account for the profits of Merit. About the time that Davis ceased doing business with City Wide and turned over the books and records to the Bank, Green took over the business of the Bank’s insurance interests, in the name of Merit. He also caused the agency agreement with Reserve to be changed to the Merit agency. Green procured new policies for the automobiles financed by the Bank, but did not service those issued through City Wide. Plaintiff theorizes that, since neither Davis nor Green complied with the provisions in their partnership agreement regarding termination or dissolution, the partnership and accompanying fiduciary relationship continued. If this were true then Green would have to account for profits made in breach of that relationship. Metcalfe v. Bradshaw, 145 Ill 124, 33 NE 1116. However, the statute provides that dissolution of a partnership is the change of the relation of the partners caused by any partner ceasing to be associated in the carrying on, as distinguished from the winding up, of the business. (Ill Rev Stats 1957, c 106%, par 29.) Section 31 of that Act provides that dissolution may be caused, in contravention of the agreement, by the express will of any partner at any time. Once Davis left City Wide the partnership was dissolved. Although the dissolution may have been in contravention of the agreement, nonetheless the fiduciary relationship ceased and Green was free to do business on his own under the name of Merit. Meyer v. Sharp, 341 Ill App 431, 94 NE2d 510.

Plaintiff finally contends that he is entitled to recover from the Bank Davis’ share of the final net profits of City Wide. The Bank, on the other hand, claims that Davis pledged these profits (if any) as security against his other indebtedness to the Bank or, in the alternative, that the Bank has a right to rely on the principal of equitable setoff.

Although there was testimony by an officer of the Bank that Davis had on more than one occasion pledged his share of the partnership profits, the master in his report found that there was no such agreement, oral or written. It has been held that the findings of the master, when approved by the chancellor, will not be disturbed unless they are against the manifest weight of the evidence. (Gallagher v. Girote, 23 Ill2d 170, 177 NE2d 103; Barker v. Barker, 36 Ill App2d 20, 183 NE2d 518), and we cannot say that this finding was erroneous.

Plaintiff is a judgment creditor of Davis seeking to reach property in the hands of the Bank. While ordinarily a judgment creditor filing a creditor’s bill will be preferred to other creditors (Cole v. Marple, 98 Ill 58, 38 Am Rep 83; Reis v. Ravens, 68 Ill App 53), this rule is not applicable to defendant creditors who would have a right of setoff against the judgment debtor. Bonte v. Cooper, 90 Ill 440, illustrates that exception. Bonte was a judgment creditor of one Hinman. Hinman was indebted to Cooper, who came into possession of money belonging to Hinman, in the amount of that debt. The court, realizing that if Hinman were to sue for his money, Cooper would have the right to a setoff, refused to sustain the creditor’s bill against Cooper. In that same case, against another holding money of Hinman’s, the court said on page 444: “We do not understand that the judgment creditors of Hinman had any greater or superior right to the money than Hinman himself.”

Applying the reasoning of the Bonte case to the case at bar, it becomes apparent that, even in absence of an express agreement between Davis and the Bank, Davis would be unable to recover the profits of City Wide from the Bank. Clearly the Bank would have the right to set off the Davis’ indebtedness to it. Plaintiff, who is not in a position superior to that of his judgment debtor, has no claim nor right to Davis’ share of City Wide’s profits ($4,214.58) in the hands of the Bank.

Decree affirmed.

SCHWARTZ and DEMPSEY, JJ., concur.


source: Caselaw Access Project

author: JUSTICE SCHWARTZ.

license: Public Domain

text:
    Peter S. Sarelas, Plaintiff-Appellant, v. Themis Anagnost, Defendant-Appellee.
    Gen. No. 51,036. (Abstract of Decision.)
    First District, Third Division.
    May 11, 1967.
    Appellant’s petition for rehearing denied June 8,1967.
    Appellee’s petition for rehearing denied September 21, 1967.
    Peter S. Sarelas, pro se, of Chicago, appellant; Gerald M. Chapman and Edmond Mosley, of Chicago, for appellee.
   Opinion by

JUSTICE SCHWARTZ.

Not to be published in full.


author: ME. JUSTICE DEMPSEY

text:
    People of the State of Illinois, Plaintiff-Appellee, v. Carl Ricks, Defendant-Appellant.
    Gen. No. 51,156.
    First District, Third Division.
    May 11, 1967.

      Stanford L. Glass, of Chicago, for appellant.
    Daniel P. Ward, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and E. James Gildea, Assistant State’s Attorneys, of counsel), for appellee.
   ME. JUSTICE DEMPSEY

delivered the opinion of the court.

Carl Picks and Saul Colbert were indicted for robbing Bill Boekhoff while armed with a dangerous weapon. The robbery took place on March 12, 1962, and $2 in a billfold, about 80 cents in change and a pocketknife were taken. Ricks was tried separately by a jury and found guilty. He was sentenced to four to ten years in the penitentiary.

Boekhoff had left a tavern on Archer Avenue in Summit, Illinois about 2:15 a. m. and was a block and a half from his home on 62nd Place when he noticed two colored men walking rapidly down the street in back of him. As they approached he stepped aside to let them pass. One man walked in front of him but the other stopped behind him and grabbed him around the neck. Both men then jumped on him and all three fell to the ground. While they were lying on the ground one man held a .25 caliber, bluesteel, automatic pistol to his head while the other one went through his pockets. The man who stopped behind him and who went through his pockets wore a dark blue coat; the man who stepped in front of him and who held the gun to his head wore a brown corduroy, fingertip jacket and had a “beanie” type cap with a small visor and a button on top.

When the men left, Boekhoff returned to the tavern and called the police. He had not seen their faces too clearly but he gave Officer Schwartz of the Summit police, who responded to his call, a description of the gun used in the robbery and the clothing worn by each man. He and Schwartz toured the neighborhood in a police car looking for the robbers. Some 15 minutes later they saw them standing near the corner of 62nd Street and Archer Avenue, two blocks from where the robbery took place. They drove past them and rendezvoused with two other officers who were in another squad car aiding in the search for the robbers. Schwartz circled around and the other car proceeded through an alley. They converged at the corner of the street and alley where the two men were walking. The officers placed them under arrest. Saul Colbert, the man with the dark coat, was seen throwing an object away. It was retrieved and proved to be Boekhoff’s pocketknife. A .25 caliber, bluesteel, automatic pistol, tucked in the belt of the man with the brown corduroy jacket, the defendant Carl Ricks, dropped between his feet as the officers searched him. A further search was made at the police station. Ricks had two single-dollar bills, one five-dollar bill and $1.50 in change. The billfold was not found. Boekhoff received it in the mail three days later; with the exception of the $2 everything else was intact.

Ricks denied the robbery. He admitted that the gun was his and testified he had bought it at 6 a. m. the morning of November 11th for the protection of an elderly woman with whom he lived. He did not give the gun to the woman but had carried it on his person from 6 a. m. November 11th until his arrest at 2:45 a. m. November 12th. During this time he loaded it with cartridges. After being away all day he returned to his home, which was in the vicinity of the robbery, about midnight on the 11th. He testified that Colbert came to his house around 1 a. m. on the 12th. They went outside to talk and wandered aimlessly about until they got to the corner of 62nd Street and Archer where they stood out in the cold for approximately an hour. As they stood there he transferred the gun from his pocket to his belt. They saw the police squad cars pass by but paid no attention to them. They then decided to go home and as they approached the mouth of an alley the squad cars pulled up and the officers jumped out, told them to raise their hands and searched them. He acknowledged that Boekhoff’s pocketknife was found nearby.

Two points are raised in this appeal: the identity of the defendant was not proved beyond a reasonable doubt and the trial court erred in not calling Officer- Schwartz as a court’s witness.

The defendant’s argument as to the deficiency of his identification is based on the fact that Boekhoff did not describe his facial characteristics and that he was not picked out in a police lineup. Boekhoff frankly stated that he was unable to discern distinctly the features of the men as they attacked him and wrestled him to the ground. However, he had a close-up look at their clothing and the gun. That Boekhoff did not pretend to see more than he did makes his description of what he did see more credible. The circumstances of the arrest made selection in a lineup unnecessary.

The total evidence sustains the guilty verdict. The defendant and his companion were arrested within two blocks of the crime shortly after it was committed. They were wearing the exact clothing Boekhoff told the police the robbers wore. The defendant carried a gun that matched the one described by the victim; the defendant’s companion had the pocketknife stolen from the victim. The explanation given by the defendant for his possession of the gun and for his being with Colbert at 2:45 in the morning would be difficult for even a credulous juror to accept. Although Boekhoff did not identify the robbers by their faces, the identification he did make of the defendant together with the other circumstances in the case was sufficient to establish the defendant’s guilt beyond a reasonable doubt. People v. Pelkola, 19 Ill2d 156, 166 NE2d 54 (1960); People v. Maciejewski, 294 Ill 390,128 NE 489 (1920).

Before the trial started the defendant made a motion to suppress the evidence (the gun and the knife) and called Officer Schwartz as a witness. Upon cross-examination by the State it was brought out that his testimony differed in two or three respects from what he had told the prosecutor before he took the stand. The State did not use him as a witness in the jury trial. When the State rested its case without calling Schwartz the defense asked that he be called as the court’s witness and gave as the reason the variations between his testimony and that of the other State witnesses. The trial court denied the motion and his ruling is urged as error. It is argued that Schwartz’ testimony as the court’s witness would have raised a reasonable doubt as to the defendant’s guilt.

Whether or not a witness should be called as the court’s witness rests in the discretion of the court. People v. Collins, 25 Ill2d 605, 186 NE2d 30 (1962). The State is not obliged to call all available witnesses. People v. Huff, 29 Ill2d 315, 194 NE2d 230 (1963). Officer Schwartz was not an eyewitness to the crime and his testimony, in the main, would have been cumulative. The State did not use him as a witness in its case in chief and this is understandable in view of the discrepancies between the story he told the prosecutor and his testimony as a defense witness on the motion to suppress. There were also minor variations between his testimony and the subsequent testimony given by Boekhoff and the other officers at the trial. The defendant could have called him as his' own witness but apparently did not wish to do so because his overall testimony on the motion to suppress was very damaging to the defendant and was corroborative, except as to the two or three details, of the testimony of Boekhoff. The obvious purpose of the defendant in asking the court to make Schwartz its witness was to get his testimonial discrepancies before the jury and not because his substantive testimony was important to prevent a miscarriage of justice or because he was unexpectedly hostile.- The court ruled that no showing had been made why he should be called as the court’s witness. We find no abuse of the court’s discretion.

The judgment is affirmed.

Affirmed.

SULLIVAN, P. J. and SCHWARTZ, J., concur.


text:
    People of the State of Illinois, Respondent-Appellee, v. Louis Owens, Petitioner-Appellant.
    Gen. No. 51,760.
    First District, Third Division.
    May 11, 1967.

      Stuart K. Taussig, of Chicago (Marvin Cohn, of counsel), for appellant.
    Daniel P. Ward, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and Joel M. Flaum, Assistant State’s Attorneys, of counsel), for appellee.
   MR. PRESIDING JUSTICE SULLIVAN

delivered the opinion of the court.

A writ of error was sued out of the Supreme Court by the defendant, who was convicted of assault with intent to commit robbery and was sentenced to the Illinois State Penitentiary for a term of not less than seven nor more than fourteen years.

The defendant raises the point that he had made requisite demand for counsel other than the Public Defender and the arraignment judge erred in not appointing such other counsel.

After the issuance of the writ of error in the Supreme Court the case was continued generally to permit the defendant to file a petition under the Post-Conviction Act. In that petition the defendant raised the same point as is presently before us. Upon a denial of his petition by the trial court defendant appealed to the Supreme Court, which held in People v. Owens, 34 Ill 2d 149, 214 NE2d 749, that the right of an indigent defendant to demand counsel other than the Public Defender derived wholly from the statute, and was not a constitutional right. The Supreme Court therefore affirmed the judgment of the trial court on the post-conviction hearing. Thereafter the Supreme Court transferred the present case to this court, stating in its order of transfer that there is no substantial constitutional question presented on this writ of error.

On November 17, 1959, the defendant was arraigned in the criminal court of Cook County and the following colloquy took place:

“The Court: Louis, you are charged with robbery while armed and assault with intent to commit robbery. Have you got a lawyer?
“The Defendant: No, sir, not at present.
“The Court: Got any money to hire a lawyer ?
“The Defendant: No, sir.
“The Court: Public Defender.
“The Defendant: Is it possible to have a bar association lawyer?
“The Court: I have received notice from the bar association that they won’t appoint any more lawyers. Public defender.”

The case was thereafter assigned to another judge for trial and the defendant insisted upon trying his own case. As heretofore noted, he was found guilty by a jury and judgment was entered on the finding.

At the time of the arraignment of the defendant the statute upon which he relied provided in part: “Any court may, with the consent of the defendant, appoint counsel, other than the public defender, and shall so appoint if the defendant shall so demand.” (Ill Rev Stats, 1959, c 34, par 5604.)

It is the contention of the defendant that when he was arraigned he demanded counsel other than the Public Defender. The defendant had asked the court if it were possible to have a bar association lawyer. The State contends that the court’s answer to him to the effect that the judge had been informed that the bar association would not appoint any more lawyers was a clear answer to the problem. While the defendant asked for a bar association lawyer, he did not specifically ask for a Chicago Bar Association lawyer, or a lawyer associated with any particular bar association. Obviously, the purpose of the defendant in putting the question to the court was to obtain counsel other than the Public Defender. An indigent prisoner is not presumed to be learned in statutory law. The intent of the legislature in passing that act was to give an indigent prisoner the right to be represented by a lawyer other than the Public Defender if he so requested.

In discussing the Criminal Code and the act relating to public defenders, in the case of People v. Gray, 33 Ill 2d 349, 355, 211 NE2d 369, the court said:

“We therefore hold that section 2 of division XIII of the Criminal Code and section 4 of the act relating to public defenders require appointment of nonpublic defender counsel in the first instance when requested by an indigent defendant, . . .” (Emphasis added.)

To request means to ask. There can be little doubt but that when the defendant asked if it were possible to have a bar association lawyer represent him the judge thought the defendant was referring to the Chicago Bar Association. The judge answered that he had received notice from the Bar Association that they would not appoint any more lawyers. Of course, the Chicago Bar Association had no power of appointment and the judge could have and, in our opinion, should have appointed some lawyer other than the Public Defender. By this statement we do not mean to infer that a lawyer other than the Public Defender could have given the defendant better representation in court than he could receive through representation by the Public Defender. Nevertheless, the legislature had seen fit at that time to give the indigent defendant the right to a lawyer other than the Public Defender, and the sole question with which we are concerned is whether the defendant was deprived of a statutory right by the refusal to appoint a nonpublic defender as counsel.

Section 4 of the Public Defender Act (Ill Rev Stats 1963, c 34, par 5604) was amended by the legislature in 1963 and now the court is required to appoint counsel other than the Public Defender in counties containing 500,000 or more inhabitants upon demand by the defendant, only where the defendant is charged with a capital offense.

The Supreme Court in Burke v. The Industrial Commission, 368 Ill 554, 15 NE2d 305, said that since statutes are to be construed according to their intent and meaning, a situation which is within the object, spirit, and the meaning of a statute is regarded as within the statute although not within the letter.

In People v. Fox, 269 Ill 300, 308, 110 NE 26, the court said: “Where the spirit and intention of the legislature in adopting the act are clearly expressed and its object and purposes are clearly set forth, the courts are not confined to the literal meaning of the words used, when to do so will defeat the obvious legislative intention and result in absurd consequences not contemplated or intended by it. In such cases the literal language of the statute may be departed from, and words may be changed, altered, modified and supplied, or omitted entirely, if necessary to obviate any repugnancy or inconsistency between the language used and the intention of the legislature as gathered from a consideration of the whole act. . . .”

We conclude that the object of the legislation in question, as it existed at the time of the arraignment in the instant case, was to give to the defendant the right to be represented by a nonpublic defender upon his request. We further conclude that the question put to the court by the defendant herein constituted a request for the appointment of counsel other than the Public Defender, and that request should have been honored by the court.

Reversed and remanded.

SCHWARTZ and DEMPSEY, JJ., concur.


author: PRESIDING JUSTICE MURPHY.

text:
    People of the State of Illinois, Plaintiff-Appellee, v. Emilio Garcia, Defendant-Appellant.
    Gen. No. 50,769. (Abstract of Decision.)
    First District, First Division.
    July 31, 1967.
    Gerald W. Getty, Public Defender of Cook County, of Chicago (Shelvin Singer and James J. Doherty, Assistant Public Defenders, of counsel), for appellant; John J. Stamos, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and Donald J. Veverka, Assistant State’s Attorneys, of counsel), for appellee.
   Opinion by

PRESIDING JUSTICE MURPHY.

Not to be published in full.


text:
    People of the State of Illinois, Plaintiff-Appellee, v. Andrew Lacy, Defendant-Appellant.
    Gen. No. 50,993. (Abstract of Decision.)
    First District, First Division.
    July 31, 1967.
    Gerald W. Getty, Public Defender of Cook County, of Chicago (Marshall J. Hartman and James J. Doherty, Assistant Public Defenders, of counsel), for appellant; John J. Stamos, State’s Attorney of Cook County, of Chicago (Elmer C. Kissane and Eldridge Hersey, Assistant State’s Attorneys, of counsel), for appellee.
   Opinion by

PRESIDING JUSTICE MURPHY.

Not to be published in full.


author: MR. JUSTICE ADESKO

text:
    People of the State of Illinois ex rel. Paul Rogers, et al., Plaintiffs-Appellants, v. City of Park Ridge, a Municipal Corporation, a Body Politic and Corporate, Defendant-Appellee.
    Gen. No. 51,455.
    First District, First Division.
    July 31, 1967.
    Rehearing denied and opinion modified October 11,1967.

      McLennon, McLennon & Nelson, of Park Ridge (Leo F. McLennon, of counsel), for plaintiffs-appellants.
    Shaheen, Lundberg and Callahan, of Chicago (Edgar C. Lundberg, of counsel), for defendant-appellee.
   MR. JUSTICE ADESKO

delivered the opinion of the court.

Plaintiffs appeal from an order of the trial court dismissing their complaint in quo warranto contesting the validity of three annexing ordinances of the City of Park Ridge. After a full hearing, the trial judge found the ordinances valid and dismissed the complaint.

In June and July, 1962, the City of Park Ridge, hereinafter referred to as “City,” enacted three ordinances, Nos. 62-27, 62-30 and 62-34, annexing to the City three separate parcels of land, pursuant to section 7-1-13 of the Municipal Code (Ill Rev Stats 1961, c 24, § 7-1-13). This section permits the annexation of parcels of unincorporated territory of sixty acres or less which are wholly bounded by one or more municipalities or one or more municipalities and a river or lake.

After the passage of the above ordinances this quo warranto proceeding was instituted. At least one of the relators owned property or operated a business on each of the three parcels annexed. Leave having been granted to file a complaint in quo warranto, relators alleged that the parcels annexed were not “surrounded territories” because the 1958 Ordinance No. 58-38, which purported to surround them, was null and void. In the alternative, they alleged that the three annexing ordinances were null and void for failure to comply with the statutory provisions governing annexation of surrounded territories.

Subsequent to the filing of the complaint, a petition requesting the annexation of the same territory that had been annexed by Ordinance No. 58-38, was filed with the City. The petition was signed by the President of the Board of Forest Preserve Commissioners and all three of the electors who resided on the territory described. The City then adopted Ordinance No. 62-41 annexing the Forest Preserve property as contiguous territory, pursuant to the petition and statutory authority (Ill Rev Stats 1961, c 24, § 7-1-7). Ten days later, the City adopted Ordinances Nos. 62-46, 62-43 and 62-47, which reannexed the three parcels involved in the quo warranto proceeding.

The City sets forth each of the above described ordinances in its answer. Plaintiffs’ reply denied the adequacy of the petition requesting annexation of the Forest Preserve property and alleged that the annexing ordinances were invalid for failure to comply with the Municipal Code.

No issue has been raised with regard to the power of the Forest Preserve Board to file a petition to annex property. See Houston v. Village of Maywood, 11 Ill App2d 433, 138 NE2d 37 (1956). In addition counsel for plaintiffs has now admitted, in oral argument, that if the Forest Preserve annexations are valid, the ordinances annexing the three parcels owned by relators or upon which they conducted their businesses were also valid. Houston v. Village of Maywood, supra. The only issue, therefore, is whether the three parcels involved were properly surrounded.

The City argues first that the annexation of the Forest Preserve territory by either Ordinance 58-38 or 62-41 was not necessary to effect a surrounding of plaintiffs’ properties because such properties were already surrounded by a Highway Annexation Ordinance 58-10. We note, however, that while two of the parcels were surrounded by the Highway Annexation, the highway involved dissects the third parcel. We therefore refrain from considering the validity of the Highway Annexation.

Ordinance 58-38 was adopted by the City of Park Ridge pursuant to an ordinance of the Forest Preserve Commissioners of Cook County and on the assumption that no electors resided thereon. Uncontroverted evidence introduced at the hearing establishes however that there were electors residing in the Forest Preserve area involved. People ex rel. Jordan Co. v. Village of Forest View, 21 Ill2d 384, 172 NE2d 780 (1961). Consequently, the surrounding of plaintiffs’ properties must depend on the validity of Ordinance 62-41.

Ordinance 62-41 was passed by the City of Park Ridge pursuant to an ordinance of the Board of Forest Preserve Commissioners and a Petition for the Annexation of Territory to The City of Park Ridge, Illinois, executed by the President of the Forest Preserve District and Noel B. Wysong, Dorothy M. Wysong and Miriam H. Wysong, the only three electors residing in the Forest Preserve area.

Plaintiffs attack the validity of the ordinance on four grounds. First, they claim that the electors were refused their statutory right to withdraw their signatures from the petition with the consent of the majority of the electors or because such signatures were obtained by fraud. This argument is based on the provisions of section 7-1-2 of the Municipal Code (Ill Rev Stats 1961, c 24, § 7-1-2). From a reading of Article 7 of the Municipal Code, we note that there are four methods for annexing a territory to a municipality. One is a petition signed by a majority of the electors and owners of record of land in the territory, and filing such petition with the County Clerk (§ 7-1-2). Second, a petition signed by all of the electors and owners of record of land in the territory and filed with the Municipal Clerk (§ 7-1-7). Third, is a petition signed by not less than 100 of the electors in the territory sought to be annexed and by the owners of record of more than 50 percent of such territory. This petition is to be filed with the County Court (§7-1-11). The final method applicable to surrounded territories is a petition signed by a majority of the owners of record of land in the territory or by the municipality passing an ordinance of annexation without the petition (§ 7-1-12, § 7-1-13).

The method of annexation involved in the instant case was a petition signed by all the electors and record landowners and filed with the Municipal Clerk. The statutory provision permitting withdrawal of signatures appears only in the sections dealing with annexations by the petition of a majority of electors and record landowners and filed with the County Clerk. A withdrawal provision does not appear in any of the other three methods of annexation. We therefore conclude that the right of withdrawal is not applicable to the instant case.

Plaintiffs’ second point is that the electors’ signatures on the petition were not under oath as required by the statute. The petition was signed by the electors and their signatures were notarized as having appeared before the notary “in person and under oath.” Both Noel and Dorothy Wysong filed affidavits stating the facts surrounding their signing the Petition to Annex. Neither one could remember if an oath had been administered prior to signing. This is not sufficient to overcome the notarization attached to the petition which states that the signators were under oath.

The third point raised, by plaintiffs is that the legal description in the ordinance was indefinite, uncertain and incomplete. In People ex rel. Village of Worth v. Ihde, 23 Ill2d 63, 66, 177 NE2d 313 (1961), the Supreme Court stated:

“Descriptions of municipal boundaries are not construed with the same strictness as those contained in deeds and grants (Dowsett v. City of East Moline, 8 H12d 560), and if the incorporating petition and accompanying map, when viewed together, fairly apprise the public of the property involved, the description will be considered proper. (People ex rel. Cameron v. New, 214 Ill2d 287).”

A map was attached to and incorporated as part of Ordinance 62-41. The map clearly delineated the territory that was being annexed. The surveyor who testified for plaintiffs stated that the legal description in the ordinance could not be platted. However, the Superintendent of the Cook County Map Department testified that from the legal description in the ordinance, he was able to outline the territory so described on the official county maps. We believe the description in the ordinance fully complies with the standard of specificity as set forth in Ihde and related cases.

The final point raised by plaintiffs is that because Ordinance 62-41 was passed October 6, 1962, within 60 days of a General Election, it could not become effective until November 7, 1962. The trial court’s order was entered on October 29, 1962. At that time, argue plaintiffs, they were entitled to an order of ouster.

This point was not raised by plaintiffs in their complaint or in their reply to the supplemental answer of the City, in which answer the fact that ordinance 62-41 had been adopted was set forth. The order appealed from states that it is rendered “upon the Complaint in Quo Warranto . . . and upon the Supplemental Answer of the City of Park Ridge, . . . the parties . . . each having moved for the entry of judgment.” The order contains no ruling upon the question of the 60 day rule now raised by plaintiffs in their brief. We also note that the plaintiffs did not mention this point in their written motion for a new trial.

We have carefully searched plaintiffs’ abstract and do not find in any of the pleadings or testimony contained therein, reference to the 60 day rule. This failure to abstract those portions of the record which raised the issue of the 60 day rule, if indeed it was raised at all, precludes us from determining this issue on appeal. Ellet v. Wyatt, 345 Ill App 420, 103 NE2d 526 (1952). From the state of the abstract, it appears to us that this issue was neither presented to nor considered by the trial court, and we have consistently refused to decide such issues raised for the first time on appeal. Rudolph v. O. D. Jennings & Co., 38 Ill App2d 92,186 NE2d 80 (1962).

For the foregoing reasons the judgment of the Circuit Court of Cook County is affirmed.

Judgment affirmed.

MURPHY, P. J. and BURMAN, J., concur.


text:
    Nicholas J. Koutselas, Plaintiff-Appellee, v. Certified Chemicals, Inc., an Illinois Corporation, Defendant-Appellant.
    Gen. No. M-51,575. (Abstract of Decision.)
    First District, First Division.
    July 31, 1967.
    Rehearing denied September 5,1967.
    Kangles, Schwarzbach & Preston, of Chicago (Ira I. Silbar, of counsel), for appellant; Phillip Grossman, of Chicago, for appellee.
   Opinion by

PRESIDING JUSTICE MURPHY.

Not to be published in full.


author: MR. JUSTICE BURMAN

text:
    Crane Paper Stock Company, an Illinois Corporation, Plaintiff-Appellee, v. Chicago and North Western Railway Company, a Wisconsin Corporation, Defendant-Counterclaimant-Appellee, and City of Chicago, a Municipal Corporation, Defendant-Appellant.
    Gen. No. 51,158.
    First District, First Division.
    August 4, 1967.
    Rehearing denied September 5,1967.

      Raymond F. Simon, Corporation Counsel, of Chicago (Sydney R. Drebin and Ronald S. Cope, Assistant Corporation Counsel, of counsel), for appellant.
    Burton Berger and Elmer Gertz, of Chicago, for appellee.
   MR. JUSTICE BURMAN

delivered the opinion of the court.

The plaintiff, Crane Paper Stock Company, brought this action against the City of Chicago and the Chicago and North Western Railway Company to declare the existence of plaintiff’s alleged easement; for a mandatory injunction directing the immediate removal by defendants of the concrete pier which supports the Dan Ryan Expressway from this alleged easement; for the restoration of certain railroad tracks upon the property covered by the easement; for an award of damages to plaintiff for the cost and expense involved in establishing the easement; and such other general and affirmative relief deemed proper. The Chicago and North Western filed an answer and a counterclaim against the City based on an alleged indemnification agreement. Judgment was entered on the pleadings granting the specific relief sought by plaintiff and the City was required to indemnify the Chicago and North Western. The motion to vacate the decree was denied and the City appeals.

The complaint was filed on November 13, 1964, alleging that plaintiff is the owner of land on 15th Place west of South Canal Street, which is improved with various buildings used by plaintiff for manufacturing and industrial purposes. Plaintiff’s business is dependent to a great extent upon railroad transportation. Along the southern portion of plaintiff’s property, in an easterly and westerly direction, there are a series of railroad tracks owned and maintained by plaintiff for the purpose of providing transportation. Plaintiff purchased the property from the defendant railroad company on November 25, 1959, and also acquired an exclusive easement over a long strip of property 17 feet in width, running in a westerly direction from plaintiff’s property over Union Avenue. The easement provided that plaintiff would not use the same unless and until the defendant railroad should discontinue the maintenance of its track facilities upon the property covered by the easement. At the time, the defendant railroad was operating a series of tracks upon the land covered by plaintiff’s easement. The use of the tracks gave plaintiff access to railroad service directly from plaintiff’s property. Should the railroad company discontinue its track facilities then plaintiff and its successor or assigns had the right to construct and maintain railroad tracks upon the easement.

It was further alleged that on August 1, 1961, the City and the Railroad Company entered into a written agreement granting the defendant City a perpetual easement for the construction of an overhead bridge structure in order to carry a proposed highway across the right-of-way of the railroad; that said agreement provided for the erection upon the easement of a large permanent concrete pier approximately 177 feet in length and three feet in width; that as a result of said permanent pier the easement is no longer available for railroad uses; consequently, during July of 1962, without notice to plaintiff, the defendant railroad removed its tracks from the property covered by the easement and placed said tracks upon a location to the north thereof; that the railroad may, at any time, effectively destroy plaintiff’s property by refusing or denying railroad service to plaintiff over the tracks in question, which are not located within the easement property; that in the event plaintiff fails to assert its rights at this time, plaintiff is in danger of losing forever its easement rights, its access by railroad to its property, and consequently plaintiff’s entire valuable business. Plaintiff prays that (1) the court declare the nature, extent and existence of plaintiff’s easement; (2) that the court, by mandatory injunction, direct forthwith the immediate removal by defendants of the concrete pier and restoration of the railroad tracks; and (3) that suitable damages be awarded plaintiff for the cost and expense involved in the establishment of plaintiff’s easement and such other relief deemed proper. Attached to the complaint was a copy of the conveyance by the Railroad Company including the easement.

In its amended answer, the defendant Railroad Company affirmatively asserted, that the alleged easement is not in the nature of a present easement, but rather a right to an easement in the future, which will vest upon the happening of two events:

(a) The discontinuance by defendant Chicago and North Western Railway Company of its operation and maintenance of a specified spur track; and
(b) The failure of the defendant Chicago and North Western Railway Company to furnish railroad service to specified property over any other spur track belonging to the defendant Chicago and North Western Railway Company.

It was admitted, in the answer, that it had relocated the specified spur track but, averred that it “has nevertheless continued to maintain said spur track and operate its trains thereover” and continues to this day to furnish railroad service to the property specified in plaintiff’s complaint.

The City, in a short answer, demanded strict proof of certain allegations, and generally denied the allegations of plaintiff, that as a result of the construction of the pier, the property subject to plaintiff’s easement is no longer available for railroad uses or, that plaintiff is in danger of losing its easement rights.

Plaintiff then moved for the entry of a judgment in its favor upon the pleadings. A decree was entered on May 18, 1965, holding that plaintiff has an exclusive easement over the involved property, and the defendants were ordered to forthwith remove the concrete pier which is located on plaintiff’s easement and restore the spur track which heretofore existed on the easement property. The court retained jurisdiction to determine damages suffered by plaintiff and stated, “that there is no just reason to delay the enforcement of or appeal from this decree.” While the decree recited that the matter was heard on stipulation of the parties, to have the matter heard on the pleadings, the record is clear that this stipulation was entered into only by the plaintiff and Railroad Company.

The City contends that the plaintiff does not own a present easement and that its right to use the property can only come into existence upon the happening of a contingency which may never occur. Also, that there is nothing in the record which establishes that a pier holding up a portion of the Dan Ryan Expressway is located on property over which plaintiff claims a future easement, and therefore, a judgment on the pleadings was improper.

It has long been established in Illinois, that a mandatory injunction may issue to protect the enjoyment of an easement. Ariola v. Nigro, 16 Ill2d 46, 156 NE2d 536. Also, where no material fact is at issue, a motion for judgment on the pleadings may be granted. Sullivan v. Bard, 44 Ill App2d 16, 194 NE2d 18. The question upon appeal is whether the facts and pleadings and inferences drawn therefrom raise a direct issue or any single material issue requiring the introduction of proof by the moving party. Thompson v. McGrue, 3 Ill2d 168, 119 NE2d 773.

The warranty deed upon which plaintiff alleges created its easement provides in part:

“[B]ut if said party of the first part (railroad) should discontinue to operate and maintain said spur track and does not furnish railroad service to said Parcel ‘A’ over any other spur track belonging to said party of the first part, then in that event and only as a secondary measure, will said party of the second part (plaintiff) be put to the expense and trouble of establishing his own spur track over said Parcel ‘C’, for which eventuality said party of the second part is receiving an exclusive easement from said party of the first part.” (Emphasis added.)

In its answer The Chicago and Northwestern Railway Company alleges:

“3. Defendant, Chicago and North Western Railway Company, which having relocated the specified spur track, has nevertheless, continued to maintain said spur track and operate its trains thereover.
“4. Defendant, Chicago and North Western Railway Company, continues to this day to furnish railroad service to the property specified in Exhibit A attached to plaintiff’s complaint.”

The question raised by the pleadings is whether the plaintiff has a-present right to use the easement. We believe that plaintiff can not exercise its rights of easement until and unless the railroad fails to provide railroad service to “said parcel A” and we so hold. The railroad says it still maintains this service and therefore, in our opinion, creates questions of genuine issue of material fact that require the taking of testimony and cannot be determined on the pleadings alone.

There also appears from the pleadings and the briefs filed in this court, that there is a dispute as to whether the concrete pier complained of is on the site of the future easement. We believe this also raises a question of fact. We see no merit to the contention by the City, that plaintiff’s alleged easement is void, because it violates the rule against perpetuities or, that plaintiff is guilty of laches.

It further appears that on December 15,1963, the ownership and control of the Dan Ryan Expressway was turned over to the State of Illinois, and that the pier in question is an integral part of the Expressway. We agree with the City that there cannot be a proper adjudication of the issues of this case without the State being made a party. The rule in chancery pleading and practice is that all persons who are legally or equitably interested in the subject matter and the result of the suit must be made parties. Oglesby v. Springfield Marine Bank, 385 Ill 414, 52 NE2d 1000.

For the above reasons we feel that the decree of the Chancellor should be reversed and the cause remanded for the presentation of evidence to resolve the disputed facts.

The order is reversed and the cause is remanded with directions to proceed in accordance with this opinion.

Decree reversed and cause remanded with directions.

MURPHY, P. J. and ADESKO, J., concur.


author: MR. PRESIDING JUSTICE MURPHY BTJRMAN, J.,

text:
    The State House Inn Corporation, an Illinois Corporation, Plaintiff-Appellant, v. Ben Polikoff, et al., Defendants-Appellees.
    Gen. No. 51,588.
    First District, First Division.
    August 4, 1967.
    Rehearing denied September 14,1967.
    BURMAN, J., dissenting.

      Rappaport, Clorfene & Rappaport, and Nat M. Kahn, of Chicago, for appellant.
    Tannenbaum & Polikoff, of Chicago (Julius A. Polikoff, of counsel), and Schiff, Hardin, Waite, Dorschel & Brit-ton, of Chicago (Alexander Polikoff, of counsel), for appellee.
   MR. PRESIDING JUSTICE MURPHY

delivered the opinion of the court.

This is a declaratory judgment action in which plaintiff, an Illinois corporation, seeks a declaratory decree that it is the owner of all of the assets of a joint venture known as The State House Inn. The trial court granted the motion of the principal defendant, Ben Polikoff, for a summary decree of dismissal, and plaintiff appeals. No evidence was heard, and the material facts are set forth in the pleadings and exhibits.

In 1959 and 1960, Polikoff gave $57,500 to Maurice Levy, Louis C. Rappaport, Harry Miller and Sidney Miller, the four originators of a motel project in Springfield, Illinois. Approximately 49 other persons also gave money for the project. In Polikoff v. Levy, 55 Ill App2d 229, 204 NE2d 807 (1965), this court found the undertaking to be a joint venture “to buy real estate and construct and operate a motel and to share in the profits,” with a relationship so similar to that of partners that their rights and liabilities were to be tested by the same rules.

The instant complaint, filed September 30, 1963, shows that in June, 1961, “Articles of Limited Partnership” were signed by defendant Ben Polikoff. Later Polikoff “refused to execute the required Certificate of Limited Partnership, and the same never became effective under the laws of Illinois.”

The complaint alleges that on February 3, 1962, a charter was issued for the plaintiff corporation, “and plaintiff thereupon took over the operation of the ‘State House Inn’; the assets of the enterprise were transferred to plaintiff by appropriate written instruments, and common stock issued by plaintiff to all the co-venturers in accordance with said resolution. Defendant Ben Polikoff and the said Alexander Polikoff have refused to accept the stock certificates tendered to them by plaintiff, and by his letter dated July 19, 1962, said defendant has disavowed his interest in the venture, and has determined all his transactions therein to be ‘abrogated, annulled and at an end.’ ” A photostatic copy of the letter was made a part of the complaint.

The prayer of the complaint was for a declaratory decree “finding plaintiff to be solely entitled to the ownership of all of the assets of the enterprise aforesaid and the ‘State House Inn,’ ” and that Polikoff be directed to join in necessary written directions to a trustee “to convey all its right, title and interest in and to the property of said Trust to plaintiff.”

Polikoff filed a motion for summary decree on the ground that the property owned jointly by the members of the joint venture could not, as a matter of law, be validly transferred without the consent of all the joint venturers. The plaintiff also filed a motion for a summary decree. Polikoff’s motion for a summary decree of dismissal was granted by the trial court, and judgment was entered against the plaintiff. The instant appeal followed.

The July 19, 1962, letter of Ben Polikoff, made a part of the complaint and addressed to the four originators, is as follows:

“DEMAND FOR REPAYMENT OF $57,500.00 AND NOTICE AND TENDER PURSUANT TO THE ILLINOIS SECURITIES LAW OF 1953, AS AMENDED.
“I hereby demand that you repay me the $57,500.00 I gave you as per three receipts bearing dates and for the amounts as follows: December 7, 1959, $25,000.00; February 2, 1960, $25,000.00; December 7,1960, $7,500.00.
“Notice is given that the transactions in which I gave you said $57,500.00 are voidable, and abrogated, annulled and at an end.
“Said transactions related to a motel in Springfield, Illinois, which is referred to, in the first of said receipts, as ‘State House Motor Motel’ and, in the second and third receipts, as ‘State House Motor Hotel.’
“I hereby tender to you the ‘securities sold’ (as defined in The Illinois Securities Law of 1953, as amended), including said receipts given me for the money I gave you; and I also tender and offer to give you an assignment, quit claim deed, disclaimer, and such other instruments sufficient to effect the relinquishment of any interest in said motel (or hotel) and in all appurtenances thereto, and in all furniture and equipment therein, and in the parking lot or so-called ‘vacant lot,’ which you may suppose I have by virtue of such transactions, or otherwise.”

Subsequent to the writing of the letter, Polikoff brought suit, contending that the transaction came within the meaning of the Illinois Securities Law of 1953 and of the Federal Securities Act of 1933, and that since the sale had not been registered with the appropriate state and federal agencies, he was entitled to avoid the same and recover the payments he had made. In Polikoff v. Levy, 55 Il App2d 229, 204 NE2d 807, this court held that Polikoff had entered into a joint venture relationship and the securities law did not apply.

Both sides have asserted a number of contentions which do not require discussion, because of our concept of the principles to be applied to the undisputed facts appearing in the record.

Initially, we agree with plaintiff that Ben Polikoff was a member of the State House Inn joint venture, and that partnership legal principles govern joint ventures.

We further agree that since no “definite term” had been specified by the co-venturers, the July 19, 1962, letter of Polikoff must be viewed as his express will to withdraw from the joint venture. The execution and delivery of his letter was tantamount to a “ceasing to be associated” and caused a dissolution of the joint venture (Ill Rev Stats 1965, c 106%, §§29 and 31).

Plaintiff’s basic contentions are: (1) “When Ben Polikoff demanded the return of his payments into the project and refused to join in the transfer of title to all the joint venture assets to the plaintiff corporation, he virtually resigned as a member of the joint venture. He made his choice to be a monetary creditor and thereby waived his right to object to the title of the plaintiff corporation to the joint venture assets, and the title of the corporation to the motel assets were consequently of no concern to him.” (2) “When Ben Polikoff withdrew as a member of the joint venture, the other members continued the quasi-partnership. The previous existing quasi-partnership was deemed dissolved by his withdrawal, and a new partnership was formed in corporate form by the continuation of the project by the remaining members.” (3) “Assuming, but without conceding, that the principal defendant, Ben Polikoff, had a cause of action because he was deprived of his interest in the joint venture, or damaged by the transfer of title to its assets to the plaintiff corporation without his consent, the correct measure of damages is the value of his interest in the joint venture on either April 11, 1962, the date of the contract of transfer of title, or July 19, 1962, the date of his demand for the return of his payments into the enterprise.”

Defendant Polikoff, not conceding that his offer and demand under the Illinois Securities Law had been a “virtual resignation,” contends that if his actions may be viewed as tantamount to withdrawal as a member of the joint venture, “such a withdrawal would have been cause for the dissolution, but not the termination, of the joint venture, and Polikoff would have retained his joint venture membership with all of his rights until the joint venture was wound up. ‘Under the Uniform Partnership Act the relationship of partners may be said to continue after dissolution so far as necessary to wind up the business. . . .’ 1 Rowley on Partnership, p 583 (2nd ed, 1960). Since there has been no such windup, the Securities Law offer and demand — even viewing it as a withdrawal— would not have constituted a ‘waiver’ of Polikoff’s rights as a joint venturer, including his right to object to the attempted transfer of the property to the plaintiff corporation. . . . Accordingly, even if a new joint venture had been formed without Polikoff, as plaintiff contends, the new joint venture (whether ‘in corporate form’ or not) would not own the property of the old.”

As previously noted, we consider Polikoff’s letter of July 19, 1962, to have been a withdrawal which caused the dissolution of the joint venture. Therefore, the next question to be determined is whether this relegated Polikoff to the “status of an ordinary creditor,” or did the relationship of partners continue until the winding up of the affairs of the joint venture had been completed (§ 30).

On this point, absent an agreement to the contrary, defendant asserts that the formation of a new partnership following a change in membership of the old partnership does not affect a transfer of title to the property, and cites 68 CJS, Partnership, pp 748-749, where it is said:

“[W]here a firm dissolves by a change in its membership and a new firm is formed, the property interests of the old firm belong to the old firm and do not become the property of the new firm without a clear agreement to that effect. . . .”

Defendant further asserts that “less than all the members of a joint venture do not have power to transfer all the property owned jointly by all the members to a corporation for stock in the corporation to be distributed by it to the members.” Principally cited in support is Fortugno v. Hudson Manure Co., 51 NJ Super 482, 144 A2d 207 (1958), where partnership property was used to organize or acquire corporations without the consent of all the partners. There the court said (p 215):

“Less than all the partners in a partnership may not bind the partnership by an act or acts not performed for the purpose of carrying on the usual business of the partnership, unless authorized by the other partners. . . . This applies particularly to a situation where one or several partners, but not all, seek to incorporate a partnership and transfer the assets of the partnership to the new corporation. . . . Where such acts are not ratified by the other partners, the property remains that of the partnership and may be traced into the corporation .... It is, of course, basic that no one can be made a stockholder in a corporation without his knowledge and consent . . . .”

And at pp 218-219:

“We hold, however, that the partnership agreement does not bind us to a distribution of the corporate stock itself. The agreement did not contemplate the transfer of partnership assets into corporations and a subsequent dissolution and distribution of the several corporate stocks, thereby transforming a full partner (here, Arthur) into a minority stockholder, denying him an effective withdrawal from the partnership enterprise upon liquidation, but instead compelling him to remain an unwilling minority stockholder in the several continuing corporations. . . . We therefore conclude that the assets of the partnership, including those of all the corporations, should be liquidated, and the proceeds distributed in cash.”

Other authorities include Lindley on Partnership, (10 Ed), Bk III, chapter 2, § 3, p 394:

“Each partner is entitled to say to the others, T became a partner in a concern formed for a definite purpose, and upon terms which were agreed upon by all of us, and you have no right, without my consent, to engage me in any other concern, nor to hold me to any other terms, nor to get rid of me, if I decline to assent to a variation in the agreement by which you are bound to me and I to you.’ ”

Also, 8 Fletcher, Cyclopedia Corporations, 1966 Revised Volume, p 316 :

“An association can act only through its representatives having authority to act for it in the matter of incorporation. Such authority can be derived only from the unanimous consent of the members or from a consent given by persons having the power to bind the rest. This rule applies particularly to a situation where one or several, but not all, seek to incorporate the partnership and transfer the assets of the partnership to the new corporation.”

Plaintiff argues that the Fortugno case is not applicable here and states, “The principal distinction is that in Fortugno, the court’s ruling was for an immediate wind-up and liquidation of all the five-family partnerships so that the irascible brother, who started the litigation, would receive a distribution in kind of the partnership assets. That is not the situation in the case at bar, where Section 42 of the Illinois Uniform Partnership Act determines that Polikoff, the sole dissenting member of the group, and who wrongfully caused the dissolution of the joint venture, should have the value of his partnership interest determined as of July 19, 1962, the date of the dissolution that he precipitated, and he will thereby become an ordinary creditor for this amount, together with the other incidental benefits under this statutory remedy.”

Plaintiff further argues that Polikoff, as a joint venturer, was a fiduciary who wrongfully caused the dissolution and cites sections 38(2) (b), 41(3) (5), and 42 of the Partnership Act to show that Polikoff was “relegated to the status of an ordinary creditor.”

As to Polikoff’s fiduciary status in the joint venture, we agree he had a fiduciary relation to the other members and was “bound to the utmost good faith in all dealings and transactions that affected the other [s] in the partnership business.” (Bakalis v. Bressler, 1 Ill 2d 72, 78, 115 NE2d 323 (1953).) However, we are not persuaded that the complaint alleges any facts which show that his conduct in resigning or retiring as a member of the joint venture was wrongful, therefor the Partnership Act sections which deal with a dissolution wrongfully caused by a partner do not apply here. We conclude the record here does not show that section 42 should be applied.

In Englestein v. Mackie, 35 Ill App2d 276, 182 NE2d 351 (1962), this court said (p 288) :

“Dissolution does not terminate the partnership and does not end completely the authority of the partners. The order of events is: (1) dissolution; (2) winding up; and (3) termination. Termination extinguishes their authority. It is the ultimate result of the winding up and occurs at the conclusion of the wind up.”

We believe the foregoing principles announced in Englestein v. Mackie apply here. Polikoff caused a dissolution, which required a “winding up of the partnership affairs,” and this windup has not been accomplished. Although the remaining members of the joint venture have determined that the motel project should be operated in corporate form, their assignment of the joint venture assets was not binding on Polikoff, and as said in the Fortugno case (p 216):

“Where such acts are not ratified by the other partners, the property remains that of a partnership and may be traced into the corporation.”

Also, in Bonde v. Weber, 6 Ill2d 365, 128 NE2d 883 (1955), it is said (p 378) :

"... a partner’s right in specific partnership property is not assignable except in connection with the assignment of all the partners in the same property. (Ill Rev Stats 1953, c 106%, par 25(2) (a) and (b).)”

Because the matter in controversy is now being litigated in another lawsuit, we have tried to confine this opinion only to those facets of the controversy which we believe determinative of the issues here. For the reasons given, we conclude the motion of defendant for a summary decree was properly granted and, therefore, the judgment of the trial court is affirmed.

Affirmed.

ADESKO, J., concurs.

BTJRMAN, J.,

dissenting:

I agree with the majority of this court that by his letter of July 19, 1962, Polikoff elected to retire and withdraw from the joint venture he entered into with approximately forty-nine other persons. The actions of Polikoff clearly show that Polikoff, who is a quasi-partner of this joint venture, refused to execute a transfer of the legal title to the involved real estate solely because his money was not returned to him. He unsuccessfully attempted to force his co-venturers to repay to him the sum of $57,500 which he invested in the venture on the theory that the sale of units to him was in violation of the Securities Act because the sale of securities was not registered with the appropriate agencies.

Having failed in this attempt he now refuses to join in the transfer of the legal title to this real estate to the plaintiff corporation which was executed by forty-six of the forty-nine members of the joint venture. Having a fiduciary relation to the other joint venturers Polikoff is bound to the utmost good faith in their joint transactions. Instead he chose not to continue in the enterprise and retired from the business. The other joint venturers desire to continue the business. Under the circumstances I believe section 42 of the Illinois Uniform Partnership Act (Ill Rev Stats 1965, c 106^) applies. It provides, as follows:

“When any partner retires . . . and the business is continued under any of the conditions set forth in Section 41 (1, 2, 3, 5, 6) or Section 38 (2b), without any settlement of accounts as between him ... and the person or partnership continuing the business . . . he . . . may have the value of his interest at the date of dissolution ascertained, and shall receive as an ordinary creditor an amount equal to the value of his interest in the dissolved partnership with interest. ...”

Section 38 (2b) referred to above provides:

“The partners who have not caused the dissolution wrongfully, if they all desire to continue the business . . . may possess the partnership property, provided they secure the payment by bond approved by the court, or pay to any partner who has caused the dissolution wrongfully, the value of his interest in the partnership at the dissolution. ...”

Section41(5) provides:

“When any partner wrongfully causes a dissolution and the remaining partners continue the business under the provisions of Section 38 (2b), either alone or with others, and without liquidation of the partnership affairs, creditors of the dissolved partnership are also creditors of the person or partnership continuing the business.”
There was no specific term stipulated for the continuation of the joint venture. Section 31(b) of the Illinois Uniform Partnership Act provides that it is terminable at the will of any one of its members. (Ill Rev Stats 1965, c 106%, § 31(1) (b)), when no definite term is specified.

The surviving joint venturers should be permitted to continue its business without liquidation of the partnership affairs. Under equitable principles and in conformity with section 42 the Chancellor should have ascertained the date of dissolution and determined the value of Polikoff’s interest on that date and directed that Plaintiff pay to him an amount equal to the value of his interest. In my judgment the summary decree should be reversed and the case remanded for trial in accordance with the views expressed herein.


text:
    Show of Shows, Inc., Plaintiff-Appellant, v. Illinois Liquor Control Commission, et al., Defendants-Appellees.
    Gen. No. 51,818.
    First District, First Division.
    August 4, 1967.

      Masters & Sands, of Chicago (Julius Lucius Echeles, of counsel), for appellant.
    William G. Clark, Attorney General of the State of Illinois, of Chicago (Richard A. Michael, Assistant Attorney General, of counsel), for appellees.
   MR. JUSTICE BURMAN

delivered the opinion of the court.

Plaintiff, Show of Shows, Inc., filed a statutory action in the Circuit Court under the Administrative Review Act (Ill Rev Stats 1965, c 110, §§ 264-279), as provided in sections 8 and 8b, of article VII of the Liquor Control Act (Ill Rev Stats 1965, c 43, §§ 153 and 154(a)), to review the administrative order of the Liquor Control Commission which revoked the plaintiff’s liquor dealer’s license. The Commission found that the licensee permitted the violation of the Cicero Ordinance, section 40-20(a), prohibiting the licensee from permitting solicitation of drinks on the premises by female employees and revoked its liquor license. The Circuit Court affirmed the Commission’s order and plaintiff appeals. No question is raised as to the pleadings.

The plaintiff contends that the hearings before the Commission did not proceed in the manner provided by law and, therefore, in violation of plaintiff’s right to a fair hearing in accordance with due process of law, and that the findings of the Commission were not supported by substantial evidence in the light of the whole record.

Under the Illinois Liquor Control Act, a local commission may revoke for cause a local license issued for premises within its jurisdiction. Under that act “for cause” includes the violation:

... of any valid ordinance or resolution enacted by the particular city council, president or board of trustees or county board (as the case may be) or any applicable rule or regulations established by the local liquor control commissioner or the State commission which is not inconsistent with law. Ill Rev Stats 1965, c 43, § 149.

The involved ordinance of the Town of Cicero (section 40-20 (a)) provided as follows:

It shall be unlawful for any licensee, his manager or other person in charge of any licensed premises where alcoholic liquor is sold or offered for sale for consumption thereon to engage, employ or permit the engagement or employment of any female, or to permit any other female to remain on the premises, who shall solicit any patron or customer thereof to purchase alcoholic liquor or non-alcoholic liquor or for her, himself, or any other person therein. . . .

Section 274 of the Administrative Review Act provides that the hearing on review, “shall extend to all questions of law and of fact presented by the entire record before the court.” The findings and conclusions of the administrative agency on questions of fact shall be held to be prima facie true and correct unless overcome by the manifest weight of the evidence. Nechi v. Daley, 40 Ill App2d 326,188 NE2d 243.

The record before us reveals that Officer Sam Cuomo, accompanied by two other Illinois State troopers, entered the plaintiff’s premises on February 17, 1966, at about 10:10 p. m. and sat at the bar. The bartender served him a whiskey and seltzer. He testified further, that Sandra Carlos came over and asked him if he would buy her a drink, and he agreed. He said this occurred in the presence of the bartender, Mike Carta, who was standing straight across from him behind the bar. He said neither he nor the girl told the bartender what the girl would drink, but that the bartender “put two glasses in front of her and poured out two light colored drinks in two shot glasses from a clear bottle and took $2 from my money and rang it up.” He said the girl had four more drinks, two at a time, under the same procedure.

Robert Teyema, an Illinois State policeman, testified that he accompanied Cuomo and Trooper Luzak on the evening in question. He said that he and Luzak were approached by two girls while the bartender was about seven or eight feet away. He related that the bartender came over, Peggy Powers asked him to buy her a drink in the presence of the bartender, which he agreed to, and then she told the bartender “Mike, give me a drink.” He testified that the bartender served several rounds of drinks for the four of them and $6 was paid for each round. On redirect examination he testified that the girl said she worked there.

Jack Yoneover, secretary-treasurer of the plaintiff corporation and manager of the tavern, testified that he was in the tavern that evening and saw the officers and the three girls after they were under arrest. He said the girls had been hired to dance, were all under contracts and that they were members of the American Guild of Variety Artists. He testified that if they were invited by friends to have a drink they had permission to do so. The girls were instructed never to get inebriated on the premises and to conduct themselves like ladies. They also had a sign in the dressing room stating, “No solicitation of drinks.”

Mike Carta testified that he was the bartender and he had served drinks to the police officers. He said the girls did not ask him to serve them drinks, but that the officers separately ordered a round of drinks. He testified that he didn’t hear any of the girls ask any of the officers to buy them a drink. He said all the drinks he served were at the request of the men.

Counsel for plaintiff acknowledges that he is aware of the rule that the decision of the Commission and the affirmance by the Circuit Court will not be disturbed unless it is contrary to the manifest weight of the evidence and the findings cannot be supported by substantial evidence in the light of the whole record. He argues, however, that it is not clear whether the girls solicited the drinks from the police officers, or if they did, that the licensee, manager or bartender knew about it or permitted it.

The evidence reveals that two officers testified that each of them was separately solicited to purchase drinks by two different females. Officer Cuomo testified, that the bartender was opposite him at the bar when the solicitation took place, and without any request by the girl, he placed two drinks in front of her, took $2 from Cuomo’s money and rang it up. This testimony was substantially corroborated by Officer Teyema. The bartender testified that he served drinks to the girls at the request of the men and that he did not hear the girls ask the men to purchase drinks.

The Commission saw and heard the witnesses. They were in a better position than this court to evaluate their testimony. The purpose of the Commission hearings is to enable it to resolve conflicting evidence and from it determine where the truth lies. Adamek v. Civil Service Commission, 17 Ill App2d 11, 149 NE2d 466. We believe the evidence amply supports the fact that the girls who were employed by plaintiff solicited the drinks and that the bartender knew about it and permitted it.

The plaintiff also contends that the Commission did not proceed in the manner provided by law and maintains that it was error for the prosecutor to ask Mr. Yoneover, on cross-examination, whether when Cuomo asked him if he was the manager of the premises, he said no. Yoneover denied he ever said he was not the manager and testified that the police officer never asked him whether he was the manager. The record shows that the prosecutor asked:

Q. You denied then you were the manager?
A. I didn’t deny anything. He didn’t ask me anything.

Plaintiff argues that after laying the ground work for impeachment, the prosecutor made not the slightest effort to impeach and that the failure to introduce any affirmative proof was improper and highly prejudicial.

We have examined the record and note that this specific contention was not raised as an issue in the trial court. Absent such procedure whereby the trial judge would have an opportunity to pass upon such a contention, it cannot be raised for the first time in this court. True v. Civil Service Commission, 350 Ill App 248, 112 NE2d 519. However, assuming, but not admitting, there was some error it was at most harmless and not prejudicial. No such factual situation exists here as in People v. Hoffman, 399 Ill 57, 77 NE2d 195, cited by plaintiff, and that case is not in point.

We are brought to a consideration of a new issue which was first brought to our attention during oral argument when plaintiff’s counsel informed us that the involved ordinance was repealed by the Town of Cicero on January 3,1957, and that the repealer ordinance did not carry with it any savings clause. We gave leave to the plaintiff to file an additional brief on this point and to the defendants to make reply. The briefs were filed and we now consider the matter.

At the outset we find no merit to the defendant’s contention that because the ordinance was repealed on January 3, 1967, and plaintiff’s brief, filed on January 11th, did not raise this point on that date or at any time before June 12th, the date of oral argument, that the motion was not timely and should not be considered.

The repealing ordinance of January 3rd recited, “Section 1. That Section 40-20 and subsections (a), (b) and (c) thereof or Article 1 of Chapter 4 of the Cicero Code of ordinances is hereby repealed.”

The plaintiffs contend that the Town of Cicero has declared, as its public policy, that the acts complained of in 1966 are no longer illegal or improper and that since such declaration of public policy was without any savings clause (cf. section 4 of the Statutory Construction Act, Ill Rev Stats 1965, c 131, § 4), the case should revert to where it started in line with the cited authorities.

The defendants contend that there is a conflict in Illinois as to whether an Appellate Court will apply the law in effect at the time of its decision or the law in effect at the time of the decision of the trial court which is under review. They further argue that the decision of the trial court should be affirmed because:

Plaintiff did not have his license revoked because he directly violated the ordinance but rather because he violated the Liquor Control Act which specifies as a ground for revocation the violation of any applicable local ordinance. . . . Although the ordinance has subsequently been repealed, the Act which served as the authority for the license remains unchanged. Since the authority for the revocation remains unchanged, the revocation should be sustained. Under any other approach a local governmental unit could effectively negate a state license revocation by changing an ordinance after the license had been judicially determined to have violated it.

The Legislature generally has the undoubted right to repeal all legislative acts which are not in the nature of a private grant. Wall v. Chesapeake & O. Ry. Co., 290 Ill 227, 125 NE 20. Where the Legislature passes a repealing act and nothing is substituted for the act that is repealed, the effect is to obliterate such act as if it had never been passed.

The unconditional repeal of a special remedial statute without a saving clause stops all pending actions where the repeal finds them. If final relief has not been granted before the repeal goes into effect it cannot be granted afterwards, even if a judgment has been entered and the cause is pending on appeal. The reviewing court must dispose of the case under the law in force when its decision is rendered. People v. Lindheimer, 371 Ill 367, 373, 21 NE2d 318.

It is clear that the determination to revoke the defendant’s license was based on the violation of an act which was repealed. The conclusion necessarily follows that in the absence of any saving clause in the repealing act as to pending suits for violation of the act, the court of review is without power to enforce the prior act.

The judgment of the trial court which was entered prior to the effective date of the repealed ordinance, is without fault, but must be reversed solely because the cause abated subsequently to its rendition. The judgment of the Circuit Court is therefore reversed.

Reversed.

MURPHY, P. J. and ADESKO, J., concur.