author: SPIVEY, J.

text:
    Citizens Savings & Loan Association, Belleville, Illinois, Collinsville Building & Loan Association, Collinsville, Illinois, Equity Savings Association, East St. Louis, Illinois, First Federal Savings & Loan Association of East St. Louis, Illinois, First Mutual Savings & Loan Association, Belleville, Illinois, Greater Belleville Savings & Loan Association, Belleville, Illinois, Home Federal Savings & Loan Association of Collinsville, Illinois, Midwest Home Savings & Loan Association, Belleville, Illinois, Security Savings Association, Belleville, Illinois, State Savings & Loan Association, East St. Louis, Illinois, Union Savings & Loan Association, Caseyville, Illinois, Plaintiffs-Appellants, and Industrial Savings & Loan Association, Plaintiff-CoAppellant, v. Joseph E. Knight, Director of Financial Institutions, State of Illinois, Francis E. Bihss, et al., Defendants-Appellees.
    Gen. No. 10,760.
    Fourth District.
    August 25, 1966.

      Chapin & Chapin, of Springfield, Listeman, Bandy & Hamilton, and Kassly, Weihl, Carr & Bone, of Bast St. Louis (Rex Carr, of counsel), for appellants.
    Drach, Terrell & Deffenbaugh, of Springfield, Goldenhersh & Goldenhersh, of East St. Louis (Michael A. Katz, of counsel), and William G. Clark, Attorney General, of Chicago (Richard A. Michael and John J. O’Toole, of counsel), for appellees.
   SPIVEY, J.

Plaintiffs-appellants, twelve savings and loan associations, together with plaintiff-coappellant, Industrial Savings & Loan Association, appeal from an order of the Circuit Court of Sangamon County, Illinois, which court affirmed an order of the Director of Financial Institutions approving the application of defendants-appellees to organize Edgemont Savings and Loan Association in the Edgemont area of East St. Louis, Illinois.

This case is a companion case in the stormy litigation between Industrial Savings & Loan Association and the McRoberts group, defendants-appellees herein, to locate their place of business in the Edgemont area.

Industrial Savings & Loan Association’s application to relocate was denied by the Director. The Director’s decision was affirmed by the Circuit Court of St. Clair County, Illinois, and again affirmed by the Fifth District Appellate Court of Illinois. (Industrial Savings & Loan Association v. Knight, et al., 67 Ill App2d 416, 214 NE2d 910.)

Industrial Savings & Loan Association, hereafter referred to as “Industrial” has injected its application denial to relocate its place of business into this appeal. This issue was settled in the Fifth District Court appeal and to the extent it has been alluded to will not be considered.

Defendants-appellees, hereinafter referred to as “Edgemont,” filed an application to organize a savings and loan association in the Edgemont area on July 11, 1960. This application was denied on September 27, 1960. Following a hearing requested by Edgemont, the Director affirmed his denial on March 4, 1961. An appeal was perfected to the Circuit Court of St. Clair County, which court, on February 16, 1962, affirmed the decision of the Director.

Edgemont reapplied to the Director for a permit to organize a savings and loan association in the same area on May 7, 1962. This application was made by some of the original applicants and others. It contained a three-year upgraded survey of the proposed territory. On January 10, 1963, the Director ordered a hearing on this application under section 2-3 of the Savings and Loan Act. (c 32, § 723, Ill Rev Stats, 1963.)

Hearings under this order were held on March 14, April 25 and April 26 of 1963. The Director approved Edgemont’s application and issued a conditional permit to organize on February 24,1964.

Separate complaints for hearing as provided by sections 7-20, 7-21 of the Savings and Loan Act (c 32, §§ 860, 861, Ill Rev Stats, 1963) were filed by Industrial and plaintiffs-appellants.

A hearing on these complaints was afforded on May 20, 1964. The Director, on August 31, 1964, affirmed his decision of February 24, 1964, approving Edgemont’s application and his issuance of a conditional permit to organize.

Thereafter followed the administrative review proceeding in the Circuit Court of Sangamon County resulting in the decision, the subject of the instant appeal.

Plaintiffs-appellants contend that the decision of the Director of March 4, 1961, affirming his decision of September 27,1960, denying the application of Edgemont, was res judicata as to the issues raised by the second application; that the decision of the Director on February 24, 1964, affirmed by the Director on August 31, 1964, granting Edgemont the conditional permit to organize is void for lack of findings; and the Director’s decision of February 24, 1964, affirmed on August 31, 1964, was contrary to the manifest weight of the evidence.

Industrial contends that a new savings and loan association is not needed in the East St. Louis area and that the establishment of Edgemont cannot be done without undue injury to Industrial.

Plaintiffs-appellants argue that the Director’s order of March 4, 1961, disapproving Edgemont’s application, and its subsequent affirmance by the Circuit Court of St. Clair County on February 16, 1962, was res judicata as to Edgemont’s second application approved on February 24, 1964, and affirmed by the Director on August 31, 1964, the subject of the instant appeal.

The extension of the doctrine of res judicata from that of purely judicial proceedings into the field of administrative law has been anything but uniform in the various states. In general it has often been said that this doctrine has no application to administrative decisions. The exceptions generally recognized in the main hinge upon the nature of the administrative action involved, particularly in cases where the administrative agency is not a party to the proceedings and those involving conflicting claims of parties coming before it. In that respect the action is sometimes referred to as “quasi-judicial.”

In some states the doctrine of res judicata is applied to administrative decisions which have been affirmed or reversed by a judicial tribunal. In most of these cases the theory prevails that the res judicata effect, if any, attached to the court’s judicial judgment rather than the administrative decision, and this is frequently so when the administrative agency is in the exercise of quasi-judicial powers. (2 Am Jur2d, Administrative Law, § 499.) For example, City of Jackson v. Holliday, 246 Miss 412,149 So2d 525, a zoning case, cited by plaintiffs-appellants.

In another case cited by plaintiffs-appellants, City of Miami Beach v. Parking Facilities, Inc. (Fla), 120 So2d 209 (1960), a zoning case, the court in referring to a prior decision of that court recognized that in zoning cases the doctrine of res judicata should be used with caution because of changes in conditions.

Illinois does not adhere to the theory of affixing the effect of the doctrine of res judicata to the court’s judgment rather than to the administrative decision. It was said in 222 East Chestnut St. Corp. v. 199 Lake Shore Drive, Inc., et al., 24 Ill App2d 545, 165 NE2d 71, “It has consistently been held that a former adjudication does not rest on the opinion of the court of review, but on the judgment of the trial court which has become final through affirmance. (Citing cases).”

We believe the rule followed in Illinois is expressed in 50 CJS, Judgments, § 624, which states, “A judgment affirmed on appeal is final and res judicata provided the judgment is of such nature that it would have been final and res judicata in the absence of an appeal, but if the judgment itself would not prevent a second action, its affirmance on appeal will not give it that effect, there being nothing to show that any question was passed on except the one on which judgment below was granted.”

We see no sound reason why this application should not be applied to judicial reviews of administrative decisions, particularly in the light of Illinois decisions.

In an appeal from the affirmance of an administrative tribunal under the Administrative Review Act which affirmed the decision of a Liquor License Appeal Commission it is stated, “If Burnette should apply for another license and if there should be another appeal to the commission, a new record would be made before that commission. A prior determination of an administrative body is not res judicata in subsequent proceedings before it. Illinois Power & Light Corp. v. Commerce Commission, 320 Ill 427, 151 NE 236; ILP, Administrative Law and Procedure, c 2, § 30. An administrative review agency has the power to deal freely with each situation that comes before it regardless of how it may have dealt with a similar or even the same situation in a previous proceeding. Mississippi River Fuel Corp. v. Illinois Commerce Commission, 1 Ill2d 509, 116 NE2d 394.” Daley v. License Appeal Commission, et al., 55 Ill App2d 474, 205 NE2d 269.

It is said in ILP, Administrative Law and Procedure, c 2, § 30, “Res judicata. A determination of an administrative body is not res judicata in subsequent proceedings even though such body was acting in its judicial capacity in making the determination.”

In the Mississippi River Fuel Corporation case it was stated, “Mississippi contends that the Commission is bound by an earlier order entered by it on January 14, 1949, in a proceeding docketed by it as No. 36,128, in which it found that Mississippi in making these industrial sales was not being conducted as a public utility, and that the sales in question were not for public use. This order was entered as a result of a citation issued by the commission on March 23, 1948. This citation was the first effort ever made by the commission to take jurisdiction over Mississippi. The commission, however, is not a judicial body, and its orders are not r-es judicata in later proceedings before it. It was so held in Illinois Power and Light Corp. v. Commerce Comm., 320 Ill 427, and in other cases. The concept of public regulation includes of necessity the philosophy that the commission shall have power to deal freely with each situation as it comes before it, regardless of how it may have dealt with a similar or even the same situation in a previous proceeding.”

Further in almost every instance the effect of res judicata does not apply to an administrative decision affirmed or reversed by a judicial tribunal when there has been a change in circumstances.

The instant application was filed with the Director on May 7, 1962, a year and ten months after the first application. Hearings on this application were held in March and April of 1963, and the decision of the Director issuing Edgemont’s conditional permit to organize was issued on February 24,1964.

The second application contained an upgraded survey of the area for three years as well as exhibits showing assets of four East St. Louis savings and loan associations as of November 20, 1962; assets of savings and loan associations in Belleville, Collinsville and East St. Louis over a period from December 31, 1959, to November 30, 1962; Edgemont’s pro forma balance sheet; number of associations in area cities; 1960 population of these cities, and number of people per association; condition of the bank of Edgemont dated December 31,1962, and a statement of its condition as of March 12,1963; and a general highway map of St. Clair County.

Absent from the record is the first application of Edgemont as well as the report of proceedings thereunder. Without this we are unable to state whether or not there has been a change in conditions between the prior proceedings and the instant proceedings relating to Edgemont.

It is axiomatic in Illinois that a party invoking the doctrine of res judicata has the burden of proving the existence and character of the judgment or decree as well as the legal effect with relation to the matters alleged to be concluded by it. (Gillies v. Little Vermilion Special Drain. Dist., 401 Ill 344, 81 NE2d 916.)

The existence of a judgment relied upon as a bar is to be proved by the production and inspection of the record. (People ex rel. McDonough v. Jarecki, 352 Ill 207,185 NE 570).

The court will not take judicial notice of a prior judgment pleaded in bar or an estoppel even though such judgment and its supporting papers are on file with the court. (50 CJS, Judgments, 836.)

Based upon the foregoing observations we are of the firm belief that the doctrine of res judicata is not applicable in the instant case for the several reasons discussed.

Industrial seriously argues that the Director’s decision of February 24, 1964, is not based upon any evidence in that the transcript of the evidence of the hearings on Edgemont’s application in March and April of 1963, was erroneously admitted in evidence at the hearing on May 20, 1964. It may be noted that counsel for Industrial was present at the hearings in March and April, 1963, and cross-examined the witnesses.

The twelve other plaintiffs-appellants stipulated that the testimony taken in the hearings of March and April, 1963, be entered into the record as taken here. Industrial objected to the inclusion of that testimony in the record.

Industrial further says in that respect that Edgemont offered no evidence on the May 20, 1964, hearing.

We think this argument is devoid of merit.

Section 2-2 of the Savings and Loan Act requires the applicants shall submit with their application statements, exhibits, maps and other data, which data shall be sufficiently detailed and comprehensive to enable the Director to pass upon the application.

Section 2-3 of the Savings and Loan Act provides in part as follows, “The Director may hear evidence to determine his findings at any time prior to the issuance of a permit to organize.”

Section 1-10 of the Savings and Loan Act provides in part, “(d) ‘Director’: The Director of Financial Institutions, or some person authorized by him to act in his stead.”

Section 7-20 of the Savings and Loan Act provides that any person who deems himself aggrieved by any decision, order or action of the Director may receive a hearing as provided in sections 7-21 through 7-24 of the Act.

Section 7-21 of the Savings and Loan Act provides, “The Director may upon his own motion and shall upon the verified complaint in writing of any person setting forth facts which if proved would constitute grounds for reversal or change of any decision, order, or action grant a hearing thereon. ... At the time and place fixed in the notice, the Director, or his authorized agent, hereinafter referred to as the Hearing Officer, shall proceed to hear the charges and both the respondent and all other parties to the action and the complainant shall be accorded ample opportunity to present in person or by counsel such statements, testimony, evidence and argument as may be pertinent to the issues. . . .” (Emphasis supplied.)

The hearing under section 7-21 is based solely on the verified complaint by the party who deems himself aggrieved and who proves grounds for reversal or change of the decision. This is the only pertinent issue before the Director. It must follow that this section recognizes that there is a decision in existence. This decision, the application and hearings, if ordered, are all an integral part of the proceedings as a whole, otherwise there would be nothing before the Director to reverse or modify. To say that the proceedings leading up to the hearing under section 7-21 have vanished and are no longer a part of the record is not based upon any sound reason.

Plaintiffs-appellants contend that the Director’s orders lack sufficient findings and are contrary to the manifest weight of the evidence.

The report of proceedings at the hearings in March and April of 1963, constitutes 420 pages plus 21 exhibits, which included the application for permit to organize the Edgemont Savings and Loan Association.

It would unduly lengthen this opinion to attempt to detail the substance of the evidence and exhibits. We have examined the evidence and exhibits as well as the report of the Hearing Officer, which consists of nineteen single-spaced typewritten pages abstracting the evidence of all the witnesses and setting out his findings and conclusions based thereon.

The Hearing Officer’s abstract of the evidence in our opinion fairly states and supports the findings and conclusions of that officer, which among other things found that the population of the Edgemont area exceeds 82,000 persons, or about one-third of the total population of East St. Louis; that other than one savings and loan association there is no other savings and loan association in East St. Louis or Belleville other than in the downtown area of each city; that the proposed capital of the proposed Edgemont association is $400,000; that there has been a constant growth experienced by all the savings and loans as well as the other financial institutions in the East St. Loüis-Belleville area in recent years; that the proposed association will not unduly injure other existing associations ; that the proposed management assures reasonable success of the association; and that a need exists for an association, and that the public convenience and advantage will be promoted in the community of East St. Louis, and specifically in the Edgemont area.

The Hearing Officer’s report on the hearing of May 20, 1964, is divided into two parts, one with reference to Industrial’s complaint and one as to plaintiffs-appellants’ complaint, pursuant to sections 7-20 and 7-21 of the Savings and Loan Act. The two reports amount to ten single-spaced typewritten pages.

Again examining the abstract of the evidence as to this hearing and the Hearing Officer’s reports, it might be fairly stated that the evidence of Jack D. Murphy was a recitation of Industrial’s effort to move their place of business to Edgemont and that the Edgemont area would support only one savings and loan association, which should be Industrial.

As to witnesses testifying on behalf of the other twelve savings and loan associations, Richard C. May and C. Allen Watson, it might be said that the evidence of Richard C. May was based upon his interpretation of a report prepared in connection with Southern Illinois University, of which he had no personal verification of the figures, supported by an exhibit showing the percentage of colored as against white population, their respective incomes, and the employment and unemployment situation in East St. Louis, Illinois.

Reference to the testimony of C. Allen Watson indicates that as to the State Savings and Loan Association, of which he was president, the savings had declined in that association between December 31, 1963, and May 18, 1964.

The Hearing Officer concluded that based upon the entire record, together with the evidence of the plaintiffs, no grounds were established for reversal or change in the Director’s prior decision.

The order of the Director of February 24, 1964, recites that a transcript of the testimony at the hearing was made; that the report of the Hearing Officer was submitted to him; that he read all the documents and papers appearing in this cause including the transcript of the testimony and exhibits therein, and based thereon he made the appropriate findings required under section 3-4 of the Illinois Savings and Loan Act.

The order of the Director on August 31, 1964, affirming his decision of February 24, 1964, makes the same recitation that he had read all the documents appearing in this case including the transcript of the testimony taken at the hearing of May 24, 1964. As to this hearing the Savings and Loan Act makes no requirement regarding findings but does provide that a copy of the Hearing Officer’s report and the Director’s order shall be served upon all respondents and all other parties to the action.

Relating to the order of February 24, 1964, approving the application to organize the Edgemont Savings and Loan Association he is required before issuing approval of the application to find the matters set forth in section 2-4 of the Savings and Loan Act.

The Director may issue a permit based upon the application, statements, exhibits, maps and other data without the necessity of a hearing. (Section 2-2.) He may also in his discretion order a hearing to assist in determining his findings. (Section 2-3.)

It would be an anomaly to say that the Director could not consider the findings and conclusions of the Hearing Officer when the Director may authorize others to act in his stead, together with the application, pertinent exhibits and the evidence adduced upon hearings in making his decision.

Similar findings were contained in the case of Harvey Federal Savings & Loan Ass’n v. Becker, 25 Ill2d 464, 185 NE2d 216, wherein it was said, “These are the requirements prescribed by section 2-4 of the statute for issuance of a permit, and there is no contention that any have been omitted. The argument that they are not specific enough has no merit insofar as the present appeal is concerned. We think it was incumbent upon the plaintiff to specify in what respect it considered the permit to have been improperly granted. Section 7-21 provides that a hearing shall be granted ‘upon the verified complaint in writing of any person setting forth facts which if proved would constitute grounds for reversal or change of any decision, ... At the time and place fixed in the notice, the Director or his authorized agent, hereafter referred to as the hearing officer, shall proceed to hear the charges and both the respondent and all other parties to the action and the complainant shall be accorded ample opportunity to present in person or by counsel such statements, testimony, evidence and argument as may be pertinent to the issues.’ ”

Plaintiffs-appellants cite Brinker Trucking Co. v. Commerce Comm., 19 Ill2d 354, 166 NE2d 18, a Commerce Commission case. It is stressed therein that the making and rendering of findings concerning the subject matter and facts inquired into and to enter its order based thereon are mandatory under the express wording of the Act. No such mandatory requirement is placed upon the Director of Financial Institutions by the Savings and Loan Act.

“The General Assembly, in expressing the policy of the Illinois Savings and Loan Act, stated that such business being so integrated with the financial institutions of the State affected the public interest and should be supervised as a business affecting the economic security and general welfare of the people of Illinois, and that the Act should be liberally construed to promote and foster the purposes of savings and loan associations.” Industrial Savings & Loan Ass’n v. Knight, et al., 67 Ill App2d 416, 214 NE2d 910.

The Supreme Court, in Skokie Federal Savings & Loan Ass’n v. Becker, 26 Ill2d 76,185 NE2d 861, in recognizing the role of the Director of Financial Institutions said, “It should be noted that the findings required by the statute and made by the Director are not simple findings of readily ascertainable facts, but represent the application of expert administrative judgment to the evidentiary facts. Such terms as ‘need,’ ‘public convenience and advantage,’ ‘reasonable probability of the success,’ and ‘undue injury’ are not facts that are susceptible to precise proof or measurement by any satisfactory judicial yardstick. They involve matters of judgment and policy. Under such circumstances, a court may not substitute its judgment for that of the administrative agency and should not reverse the order of the administrative agency unless the judgment of the agency is without substantial support in the record.”

In our judgment the record supports the findings and orders of the Director and that his action was neither arbitrary nor against the manifest weight of the evidence. We will not substitute our judgment for that of the Director so long as his judgment is not without substantial support in the record.

The decision of the Director of Financial Institutions and the Circuit Court of Sangamon County is affirmed.

Affirmed.

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


source: Caselaw Access Project

author: MR. PRESIDING JUSTICE MORAN

license: Public Domain

text:
    Gerald Schusler, Plaintiff-Appellant, v. Nelson M. Fletcher, Defendant-Appellee.
    Gen. No. 65-94.
    Second District.
    August 30, 1966.

      Joseph B. Gilbert, of Chicago, for appellant.
    Gates W. Clancy, of Geneva, for appellee.
   MR. PRESIDING JUSTICE MORAN

delivered the opinion of the court.

Plaintiff while riding as a guest passenger in an automobile owned and driven by defendant was injured when defendant lost control of his automobile and hit a tree. Suit was filed in Kane County Circuit Court charging defendant with wilful and wanton misconduct in the operation of the automobile, and from a jury verdict of not guilty plaintiff appeals.

During the trial plaintiff testified that about 10:00 o’clock p. m. on December 30, 1961, he went to Big Lee’s Tavern on Wilson Street in Batavia, had some beer and was playing a bowling machine with some other customers. About midnight he observed defendant, greeted him and joined him at the bar. They each purchased and consumed a round of beers.

Plaintiff stated on direct examination that about 1:30 a. m. he started to leave the tavern and defendant offered him a ride home; that they left the tavern about 1:45 a. m. in the defendant’s Corvette automobile with the defendant driving; that they drove East on Wilson Street and as they reached McChesney Street where plaintiff lived, defendant did not stop but kept going although plaintiff tried to get out. Defendant continued on Wilson Street to Route 59 over plaintiff’s objection, and then turned North on Route 59 and proceeded at about seventy miles per hour toward the City of West Chicago. Defendant slowed down slightly going through West Chicago and after reaching the north city limits was traveling as fast as seventy-five miles per hour. Plaintiff further testified that he repeatedly requested the defendant to slow down and stated that the highway was icy and the weather was cold and foggy. As they approached a particular curve the car went off the road, through a snowbank, traveled one hundred feet and struck a tree. Plaintiff was knocked unconscious and was subsequently taken to a hospital for treatment of his injuries.

On cross-examination plaintiff admitted that while he was hospitalized he was interviewed by an investigator and told the investigator that he and the defendant had not been to any tavern, had no drinks; that the defendant was a good driver; that he had never complained about defendant’s driving; that they were just going to ride around in Elgin; that another car was coming around the curve against them and, that the defendant was going between forty-five and fifty-five miles per hour when the accident occurred.

On redirect examination plaintiff swore that his testimony on direct examination was the truth. He also stated that the investigator who talked to him in the hospital was an insurance investigator for an insurance company, and what he told the investigator was not true. These questions and answers ensued:

“Q. Why was it that you told this investigator something you knew wasn’t true?
Mr. Clancy: I object to that.
The Court: Sustained. Why is it material ?
Mr. Gilbert: I want to explain this contradiction.
The Court: That is for the jury to decide.”

No offer of proof as to what the plaintiff would have said in response to the question was made.

The proofs offered by the defendant consisted solely of the defendant adopting his own testimony given under section 60 of the Civil Practice Act during the plaintiff’s case and the introduction in evidence over plaintiff’s objection of plaintiff’s complaint in a dramship action arising out of the same accident.

Appellant urges in this appeal that error was committed by the trial court in prohibiting him from explaining his reason for having made false answers to the insurance investigator and in admitting in evidence over his objection the complaint filed by him in a dramshop action arising from the same accident and permitting defendant to read it to the jury.

With reference to the first ground urged, it has long been the rule of law that where a witness is impeached by contradictory statements, a party calling the witness is entitled to show the circumstances under which the contradictory statements were made and to explain the reason therefor. Atchison, T. & S. F. R. Co. v. Feehan, 149 Ill 202, 215, 36 NE 1036 (1893); Walther v. Chicago & A. R. Co., 188 Ill App 221, 226 (1914); The People v. Hicks, 28 I112d 457, 463, 192 NE2d 891 (1963), and Forslund v. Chicago Transit Authority, 9 Ill App2d 290, 299, 132 NE2d 801 (1956). For this reason the subject matter of the question propounded to his client by plaintiff’s counsel was material and the trial court erred to the extent that it ruled that the question was not material, and that it was for the jury to decide.

An offer of proof is necessary where there is no other satisfactory indication to the trial judge, opposing counsel, and the reviewing court as to the substance of the proof to be made. The People v. Hoffee, 354 Ill 123, 140, 188 NE 186 (1933). However, an offer of proof is unnecessary whenever the trial judge understands the objection and character of the evidence but will not admit such evidence. Gore v. Henrotin, 165 Ill App 222, 227 (1911). We feel such is the case at bar.

The second ground for appeal relates to the admission of the complaint in a dramshop action arising out of the same state of facts. Plaintiff argues that the dram-shop complaint was not admissible either by way of impeachment or as an admission and was in any event irrelevant.

On the other hand, the defendant urges, first, that the error is not properly preserved in the post-trial motion and in this appeal and, secondly, that no error occurred.

Considering first the procedural question it appears that in the post-trial motion plaintiff alleged as error the following:

“The court erred in overruling plaintiff’s objection to counsel for the defendant reading to the jury the complaint filed by the plaintiff in another action against another defendant arising from the same accident, which complaint was later, and before the trial of this cause, dismissed.”

This same error on appeal is referred to in appellant’s brief, as follows:

“The complaint in a dramshop case alleging that the defendant in the case at bar was intoxicated at the time of the accident, was not admissible in evidence either by way of impeachment or as an admission, and was in any event irrelevant.”

Defendant urges that there is a distinction between the two allegations of error. We do not agree. We feel that the question of the admission and reading of the dramshop complaint is before us both by the post-trial motion and the appellant’s brief and that the distinction which the defense would have us draw in this respect does not exist.

With reference to the substance of the objection itself we find what appears to be conflicting reasoning in the cases. Plaintiff cites Wendzinski v. Madison Coal Corp., 282 Ill 32, 37, 118 NE 435 (1917), and McCormick v. Kopmann, 23 Ill App2d 189, 200, 161 NE2d 720 (1959). In the Wendzinski case the Illinois Supreme Court stated at page 37:

“On cross-examination he was asked if he had not made certain charges in his declaration to which his attention was called and which were inconsistent in some respects with his testimony, and the court admitted the evidence for the purpose of impeachment. The alleged matter of impeachment was not in any paper or writing signed by the witness and did not come under any rule of evidence for the impeachment of a witness. The declaration was the product of the attorney, and it was not even necessary that proof of the charges be made by the testimony of the witness. The court erred in permitting the cross-examination.”

In the McCormick case the Third District Appellate Court stated at page 200:

“Where the pleading is in the alternative in different counts, each count stands alone and inconsistent statements contained in a count cannot be used to contradict statements in another count. The intent of the cited section of the Practice Act (Sec 43 (2)) is that counts can be pleaded in the alternative regardless of consistency.”

On the other hand, defendant cites numerous decisions in support of his contention that the dramshop complaint was admissible. The cases most nearly in point are: Linn v. Clark, 295 Ill 22, 30, 128 NE 824 (1920); In re Estate of Clark, 264 Ill App 544, 547 (1932), and Bennett v. Auditorium Bldg. Corp., 299 Ill App 139, 148, 19 NE2d 626 (1939).

In the Bennett case a three-count complaint had been filed, the third count of which was based upon section 14 of the Dram Shop Act and alleged that defendant sold or gave to plaintiff alcoholic liquor causing her to become intoxicated and as a result thereof she slipped and fell. An amended complaint was filed omitting the third count of the original complaint and during the trial an effort was made to offer the original complaint in which there was an allegation of plaintiff’s intoxication.

The Appellate Court for the First District held that the complaint was admissible saying at page 148:

“Upon objection, the evidence was excluded. We think this was error. It must be assumed that plaintiff advised her attorneys of the facts and they drew her complaint accordingly.”

We believe that in light of the provisions of section 43(2) of the Civil Practice Act (c 110, § 43(2), Ill Rev Stats, 1965), authorizing alternative pleading, the better rule is that the unverified alternative pleadings should not be admissible either for impeachment or as admissions against interest. This case does not raise the issue concerning verified alternative pleadings.

In Nystrom v. Bub, 36 Ill App2d 333, 184 NE2d 273 (1962), a dramshop proceeding, the trial court refused to admit over plaintiff’s objection a complaint which plaintiff had filed at common law against the alleged intoxicant. The opinion states at pages 347 and 348:

“Another point urged by the defendants is that the trial court erred in refusing to admit the defendants’ Exhibit No. 2, which was the plaintiff’s common law complaint in the separate suit of Nystrom v. Burroughs, on the ground that the complaint contained a judicial pleading admission that Burroughs was overcome by sleepiness and fell asleep at the wheel of his automobile, and in consequence thereof crossed the highway and collided with Nystrom’s automobile. That complaint was the separate common law suit by Nystrom against Burroughs, pending in the Circuit Court of Henry County. The defendants, however, refer to only one charge of negligence stated in that case. Actually there were six alternative charges against Burroughs, including the charge of driving while intoxicated. That complaint, as an alternative pleading, is protected by the Civil Practice Act, Ch 110 Ill Rev Stats, 1961, par 43(2), from being introduced as an admission in evidence in this dram shop case. Alternative fact allegations made in good faith and based on genuine doubt are not admissions against interest so as to be admissible in evidence against the pleader: McCormick v. Kopmann et al. (1959) 23 Ill App2d 189,161 NE2d 720.”

For this reason we believe that the trial court erred in admitting and permitting the reading of the dram-shop complaint in which the alternative cause of action is pleaded. We feel that these errors require that the case be remanded for a new trial.

Reversed and remanded.

DAVIS and ABRAHAMSON, JJ., concur.


text:
    Glenn G. Briscoe and Bertha Briscoe, Plaintiffs-Appellants, v. The City of Highland Park, Illinois, an Illinois Municipal Corporation, Defendant-Appellee.
    Gen. No. 65-103.
    Second District.
    August 30, 1966.

      Russell L. Engber, of Highland Park, for appellants.
    Stanley Grosshandler, of Waukegan, for appellee.
   MR. PRESIDING JUSTICE MORAN

delivered the opinion of the court.

The plaintiffs bring this action for declaratory judgment to challenge the validity of the zoning ordinance of the City of Highland Park in Lake County as applied to four (4) vacant lots. The property is zoned for single-family residential use and was so zoned at the time the premises were acquired by the plaintiffs. The plaintiffs desired to use the property for multiple-apartment purposes and petitioned the local authorities to change the zoning ordinance authorizing such a use. Upon rejection of that petition this suit was filed. The trial court after an extended hearing found the issues in favor of the City and upheld the zoning.

The premises in question lie on the east side of St. Johns Avenue. Immediately east of the premises is a number of single-family residences and no apartments. Immediately north of the property in question is a single-family residence, then a landscaped parking lot, the City Hall, Public Library and a memorial rose garden. The architecture of the public buildings is such that they are not out of character with the residential nature of the area. West of the premises in question is the abandoned right-of-way of the Chicago, North Shore and Milwaukee Railway, and west of that is the right-of-way of the Chicago and Northwestern Railway, and then a small industrial tract on which is located a lumberyard, a beverage warehouse and a dairy building. The combined railroad rights-of-way exceed 220 feet.

The trial court under the circumstances of this case put the issue in a clear and concise manner when it said, “Even though a court might reach a different conclusion had the individual judge been a member of a Zoning Board of Appeals or a member of a City Council, nevertheless the court cannot substitute its judgment for that of such officials of the City involved.”

The legislature wisely decided that zoning is a function for local authorities. Our only jurisdiction in this case is to determine whether or not local authorities have been arbitrary or unreasonable in the exercise of the powers delegated to them.

It is elementary that the ordinance is presumed valid and that the plaintiffs have the burden of proving that it is arbitrary, unreasonable and unrelated to the public welfare. First Nat. Bank of Lake Forest v. County of Lake, 7 Ill2d 213, 225, 130 NE2d 267 (1955). Typically, the evidence indicates a wide difference of opinion both as to which uses characterize the subject property and as to the effect of the plaintiffs’ proposal on surrounding properties. The plaintiffs’ witnesses testified that the subject property was characterized by the railroad tracks and the industrial uses on the other side of the railroad tracks. In addition, they characterized the City Hall, Library and rose garden as nonresidential uses intending to establish the character of the subject property. Further, the plaintiffs alleged that they would suffer a monetary loss if the zoning were not granted.

The defendant’s witnesses on the other hand characterized the area as single-family residential and did not feel that the public buildings north of the subject property detracted from the single-family classification.

The factors to be considered in a zoning case have been reiterated on numerous occasions and it would merely extend this opinion unnecessarily for us to repeat them. Suffice it to say that the most important factor to be considered is the use and zoning of surrounding properties. Jacobson v. City of Evanston, 10 Ill2d 61, 70, 139 NE2d 205 (1956). Here, the subject property is bordered on two sides by single-family residential uses and zoning classification.

The fact that the plaintiffs knowingly purchased the property with its single-family classification is a factor and while it does not bar a person from challenging the validity of that zoning, nevertheless it is proper for us to take that into consideration in our examination of the whole case.

The late Justice Daily said in the case of Urann v. Village of Hinsdale, 30 Ill2d 170, 176, 195 NE2d 643 (1964), “It is axiomatic that the fixing of zoning boundary lines, unless arbitrary and capricious, is a matter of legislative judgment which the courts will respect, ...” In that case the court found that railroad tracks in an industrial area presented a logical line of demarcation between the industrial zone and the residential zone. The same might be said of the case at bar. The corporate authorities have found that the railroad tracks are a logical line to divide an industrial zone and a residential zone. We cannot say that this decision is unreasonable. Indeed, all of the property east of the tracks is zoned and used for single-family purposes excepting only those properties which are used for public buildings or purposes. Surely we cannot say that all public buildings must be surrounded by nonresidential uses.

The plaintiffs alleged that the circumstances have changed since the adoption of the original single-family residential classification in that the traffic on St. Johns Avenue has substantially increased. This is undoubtedly true; however, the same can be said for a majority of streets in Illinois. Traffic is a factor to be considered but it is not persuasive in a case where the increase in traffic is caused by the fact that there are more people and more cars in the State today than at the time of the adoption of the ordinance. There is no proof that St. Johns Avenue itself has been changed. Surely we could not adopt a rule requiring a change in zoning classifications for every increase in traffic. Such a rule would place nonsingle-family residential uses on many streets in the State.

The most that can be said from the record before us is that there is a fair difference of opinion regarding the validity of the ordinance. We cannot substitute our judgment for that of the local authorities. We must and do find that the trial court was correct in upholding the zoning classification.

Judgment is therefore affirmed.

Judgment affirmed.

ABRAHAMSON and DAVIS, JJ., concur.


text:
    Murl Harris, Plaintiff-Appellant, v. Nicholas Minardi, Defendant-Appellee.
    Gen. No. 65-148.
    Second District.
    August 30, 1966.
    Rehearing denied September 30,1966.

      Nash, Ferolie, Gosdick and Ohlson, of Rockford, for appellant.
    Maynard & Maynard, of Rockford, for appellee.
   MR. PRESIDING JUSTICE MORAN

delivered the opinion of the court.

On October 8, 1963, Murl Harris, the plaintiff, was riding as a passenger in an automobile driven by one John Dallavo westerly on Simpson Road in Winnebago County. Simpson Road intersects Centerville Road and has a posted speed limit of sixty-five miles per hour. The only traffic controls at the intersection are stop signs halting Centerville Road traffic before it enters Simpson Road. At the time in question the defendant, Nicholas Minardi, drove his car northerly on Centerville Road and stopped as he approached Simpson Road. He was unable to clearly see along Simpson Road because of standing corn. Minardi proceeded and struck the left side of the Dallavo car before it could clear the intersection. As a result of the accident Harris sustained injuries to his left arm, head and neck. Heat treatments, massages and traction were prescribed and administered to Harris and at the time of the trial he had medical expenses of $1,070.90. His doctor diagnosed the injury as a whiplash injury of the neck, some contusion of the skull and cerebral concussion. The doctor further testified that the condition was permanent.

This action was brought by Harris against Minardi, the driver of the other car, to recover for his personal injuries. At the conclusion of the trial the jury found Minardi guilty and rendered judgment for Harris in the amount of $2,250. Harris was not satisfied with the size of the award and filed this appeal, raising certain questions, some which will be commented upon. We conclude that error was committed and that the case must be reversed and remanded for a new trial. It is, therefore, necessary that we discuss certain issues which should be corrected upon retrial.

The plaintiff first urges that the court erred in giving the following instruction based upon section 49 of the Uniform Act Regulating Traffic on Highways (c 951/2, § 146, Ill Rev Stats (1963)) :

“There was in force in the State of Illinois at the time of the occurrence in question a certain statute which provided that:
“ ‘No person shall drive any vehicle upon any public highway of this State at a speed which is greater than is reasonable and proper with regard to traffic conditions and the use of the highway, or endangers the safety of any person or property; or is greater than the applicable maximum speed limit established by this section or by a regulation or ordinance made pursuant to the provisions of this Article. The fact that the speed of a vehicle does not exceed the applicable maximum speed limit does not relieve the driver from the duty to decrease speed when approaching and crossing an intersection, when approaching and going around a curve, when approaching a hill crest, when traveling upon any narrow or winding roadway, or when special hazard exists with respect to pedestrians or other traffic or by reason of weather or highway conditions; and speed shall be decreased as may be necessary to avoid colliding with any person or vehicle on or entering the highway in compliance with legal requirements and the duty of all persons to use due care.’
“If you decide that a party violated the statute on the occasion in question, then you may consider that - fact together with all the other facts and circumstances in evidence in determining whether or not a party was contributorily negligent before and at the time of the occurrence.”

This instruction was given as a result of the fact that one of the defendant’s theories was that the plaintiff and his driver were engaged in a joint enterprise. There was no evidence supporting this theory and the trial judge refused to give an instruction concerning joint enterprise. The trial judge did give an instruction which informed the jury that the negligence of the plaintiff’s driver could not be imputed to the plaintiff. Thereupon the foregoing instruction on speed should have been withdrawn by the defendant or refused by the trial court. The only evidence of speed in the case was on the part of the plaintiff’s driver. There is no evidence that the defendant was speeding. The speeding instruction tended to contradict the instruction on imputing negligence and the jury could have easily been confused by giving the foregoing instruction. Since the only evidence of speed was on the part of the plaintiff’s driver the jury could have concluded that they were to use this evidence against the plaintiff as well as his driver. Under such misapprehension, the jury could have reached a compromise verdict.

Considered in the context of other error committed in the trial it appears that the giving of the speeding instruction under these circumstances constituted reversible error.

The plaintiff contends that the trial court improperly commented upon the evidence. We do not find that the court’s comments were improper.

The plaintiff next urges that the trial court erred in sustaining an objection involving a question directed to the defendant which asked, “You failed to yield the right-of-way, didn’t you?” Thereupon the plaintiff attempted to impeach the defendant by offering into evidence an admission from the defendant’s discovery deposition wherein the question, “You failed to yield the right-of-way . . . ?” was asked and the answer, “Yes, that is right” given. The defendant’s answer in this instance was a legal conclusion and does not constitute an admission. The trial court was correct in sustaining the objection and in refusing the impeachment.

We now come to one of the main issues of this controversy. On July 13, 1965, pursuant to court order, the plaintiff was examined by Dr. Eugene T. Leonard on behalf of the defendant. Dr. Leonard’s written report was submitted to plaintiff’s counsel on July 16, 1965, and the trial commenced July 21, 1965. Dr. Leonard was permitted to testify over the plaintiff’s objection that there was no evidence of injury to the plaintiff and that there was no evidence that the plaintiff had ever been injured.

Section 3 of Supreme Court Rule 17-1 (c 110, § 101.17-1 (3), Ill Rev Stats 1963), provides as follows:

“Within twenty days after the completion of the examination, and in no event later than ten days before trial, the examining physician shall prepare duplicate originals of a written report of the examination, setting out his findings, results of all tests made, his diagnoses and conclusions, and deliver or mail an original of his report and of all corrections, supplements, or additions thereto, to the attorney for the party requesting the examination and a duplicate original thereof to the attorney for the party examined or for the party who produced the person who was examined. The court may enforce compliance with this requirement. If the report is not delivered or mailed to the attorney for the party examined, or for the party who produced the person who was examined, within the time herein specified or within any extensions or modifications thereof granted by the court, neither the physician’s report nor his testimony or his findings or x-ray films or the results of any tests he has made may be received in evidence except at the instance of the party examined or who produced the person examined. Adopted Oct. 21,1957.”

The issue before us is whether or not the foregoing rule is mandatory or discretionary. The committee notes in connection with the Rule state in part, “the penalty for failure to comply with the requirement is that the physician may not testify at the trial . . . ,” Historical and Practice Notes for chapter 110, section 101.17-1 (3), Smith-Hurd Illinois Annotated Statutes. This is not a case where the Supreme Court has left us in doubt as to the penalty for failure to comply with the Rule. The Rule itself provides, “If the report is not delivered or mailed to the attorney for the party examined . . . within the time herein specified or within any extensions or modifications thereof granted by the Court, neither the physician’s report nor his testimony or his findings or x-ray films or the results of any tests he has made may be received in evidence except at the instance of the party examined or who produced the person examined.” The clear language of the Rule makes the furnishing of the report mandatory and provides the penalty that the doctor’s testimony is not admissible unless made in compliance with the Rule.

This issue has not heretofore been directly presented to an Illinois court of review, however, Illinois courts have at times commented upon the Rule. In Muscarello v. Peterson, 24 Ill App2d 262, 164 NE2d 282 (1960), a duplicate original medical report was not furnished. The court noted that this occurred before the adoption of the Supreme Court Rule 17-1 and at page 274 stated that, “Supreme Court Rule 17-1 would today bar defendant from calling Dr. Oberhill as a witness at the trial under these circumstances.” On appeal, the Supreme Court in the Muscarello case in 20 Ill2d 548 at 556, 170 NE2d 564, said, “We shall refrain from commenting at length upon this feature of the case; however, since we trust that in view of Rule 17-1 of this Court similar questions will not arise in the future.”

We now hold that Supreme Court Rule 17-1 is mandatory and that a failure to comply with the Rule prohibits the use of the medical report except at the instance of the party examined or at the instance of the party who produced the person examined.

This decision is not at variance with Jackson v. Whittinghill, 39 Ill App2d 315, 188 NE2d 337 (1963). In that case the defendant received a medical examination of the plaintiff within the time prescribed by Rule 17-1. Unfortunately for the defendant his medical examination was made by a general practitioner and not by a specialist. The defendant discovered his error six days before trial and his motion for continuance was denied. The court stated at page 323, “It is obvious that the provision of Paragraph 3 (of Rule 17-1) would have been violated unless the case were removed from the trial call.” The court went on to say, at page 324, that the purpose of the Rule is not to provide an expert witness for a litigant but rather to provide for discovery. It is to be noted, however, that the Rule had already been complied with and the court was there concerned only with a second examination and not with the first examination as is true in the case before us.

The trial court’s failure to strictly enforce the Rule was compounded by the damaging nature of Dr. Leonard’s testimony. He testified that there was no injury of any kind to the plaintiff. Permitting such testimony or any medical testimony in violation of the Rule constitutes reversible error.

In Kinsell v. Hawthorne, 27 Ill App2d 314, 169 NE2d 678 (1960) at page 319, the court stated:

“It is the law in Illinois that a verdict should be set aside and a new trial granted for inadequacy of damages where it is clear that injustice has been done, or where it is obvious that a jury failed to take into consideration proper elements of damage which are clearly proven, or where it is apparent that the jury made a compromise between the guilt of the defendant and the damages sustained by a plaintiff.”

In the case at bar the plaintiff had medical expenses of $1,070.90. In addition he had a loss of profits of $2,000 to $3,000. The court instructed the jury that they could consider these factors: plus past and future pain, disability and the nature and extent of the injury. It is obvious to us that the jury’s verdict resulted from a compromise and from confusion.

The judgment entered herein is, therefore, reversed and remanded to the trial court with instructions to proceed with a new trial in accordance with this opinion.

Reversed and remanded with instructions.

DAVIS and ABRAHAMSON, JJ., concur.


author: STOUDER, J.

text:
    James Starkey, Plaintiff-Appellant, v. Brown Oil Company, a Corporation, and Phillips Petroleum Company, a Corporation, Defendants-Appellees.
    Gen. No. 65-59.
    Third District.
    September 7, 1966.
    Rehearing denied October 7,1966.

      Peter F. Ferracuti, of Ottawa, for appellant.
    Hupp & Irion, Berry & O’Conor, and Zwanzig, Thompson, Lanuti, Bower & Zwanzig, all of Ottawa, for appellees.
   STOUDER, J.

This is an appeal from an order of court granting judgment for Defendant notwithstanding the verdict for Plaintiff. The facts, which follow, are not in dispute.

Plaintiff, Appellant herein, while painting a pole at a service station on May 10, 1963, was injured when the pole broke, causing the ladder on which Plaintiff was standing, to fall. The service station was operated by Defendant, George Small, on a month-to-month verbal agreement with Defendant, Brown Oil Company, the owner of the premises. Brown Oil Company was a jobber for the exclusive distribution of the products of Phillips Petroleum Company, a third Defendant, to service stations in and around Ottawa, Rlinois, including Small’s Service Station. The pole in question was owned by Brown Oil Company. By another contract between Phillips Co. and Brown Co. called “Jobber’s Painting Contract,” Phillips agreed to paint Brown Oil Co. sign poles. Although the service station, where the pole was maintained, was leased by Brown Co. to George Small on a month-to-month lease, the evidence indicates clearly that Brown Co. retained control over the area of its poles and signs.

On April 4, 1963, Valley Painting and Decorating Service, Plaintiff’s employer, entered into a written contract with Phillips to paint the pole. Plaintiff with a coworker, started painting at the station shortly before the accident.

The pole in question was a hollow, ungalvanized, black iron pipe about twenty-eight feet long and tapering from six inches at the base to two inches at the top. It was attached at the base to a four-foot pier or drum by four bolts and had a side arm to hold a sign with a hole two inches in diameter in the pole opposite the side arm. The exterior of the pole was painted white and there were rust spots on the outside in the area of the bolts.

The pole had previously been situated at another filling station where it had been installed sometime prior to 1944. Mr. Hill, President of Brown Oil, purchased the service station in 1944 thereafter conveying it to Brown Oil Co. upon its organization in 1947., On December 12, 1960, the pole had been moved and erected at the scene of the accident and on January 23, 1961, had been taken down in order that the sign which it supported could be raised by setting the pole on the four-foot pier or drum. The pole could be removed and replaced with a truck crane.

At the time the pole was moved in 1960 and when it was re-erected in 1961 some rust was observed by the person who handled the pole. He stated that at that time, in his opinion, the pole was in condition to be reinstalled. He further testified that his opinion was based only on visual observation, that he performed no other tests to determine the condition of the pole. The President of Brown Oil Company testified that he had observed the pole in passing and saw nothing wrong with it. Plaintiff and his coworker also inspected the exterior of the pole just prior to commencing the painting operation and saw nothing to indicate that the pole was unsafe.

The usual and customary practice in painting poles of this type is for the painter to support an extension ladder against the pole and ascend the pole to paint. As Plaintiff was engaged in painting the pole, it snapped eight to ten inches from the base and Plaintiff fell to the pavement twenty-five to thirty feet below. The pole at the site of the break, was very rusty on the interior, the sound metal on the exterior being described as paper thin.

The principal controverted facts involved the questions of what care Defendant had taken to preserve and maintain the pole and to inspect it; when the hole opposite the side arm had been made, and whether it was covered or uncovered; and what Defendant should reasonably have been expected to do to anticipate and prevent the injury.

Suit was filed against Small as tenant operator and thereafter voluntarily dismissed as to him, against Brown Oil Company as owner of the premises, and against Phillips Petroleum Company as being in control of the equipment for the painting operation. The complaint contained two counts, one based on the theory of general negligence under the maxim res ipsa loquitur and the other on the theory of specific common-law negligence. At the conclusion of Plaintiff’s case the lower court allowed a motion by Phillips Petroleum Company for a directed verdict on both counts, and a motion by Brown Oil Company for a directed verdict on the res ipsa count.

At the conclusion of all the evidence, the jury returned a verdict for Plaintiff and against Defendant, Brown Oil Company, in the amount of $25,000. Brown Oil Company then filed a motion for judgment notwithstanding the verdict or in the alternative for a new trial which motion was allowed by the trial court. In the order granting Defendant’s motion, the court below found that Plaintiff had produced no evidence of negligence on the part of Brown Oil Company and further held that National Builders Bank of Chicago v. Schuham, 319 Ill App 546, 49 NE2d 825, was controlling. Plaintiff appeals from this order and from the order directing a verdict for Phillips Petroleum Company, asking that the first be reversed and the verdict be reinstated or in the alternative a new trial granted, and that the second be reversed and a new trial granted.

We shall first consider the propriety of the appeal from the order directing a verdict in favor of Phillips Petroleum Company. Chapter 110, § 68.1(2), Ill Rev Stats, provides “Relief desired after trial in jury cases, heretofore sought by reserved motions for directed verdict or motions for judgment non obstante veredicto, for judgment notwithstanding the verdict, in arrest of judgment or for new trial, must be sought in a single post-trial motion. . . . The post-trial motion must contain the points relied upon, particularly specifying the grounds in support thereof, and must state the relief desired, as for example, the entry of a judgment, the granting of a new trial, or other appropriate relief. ... A party may not urge as error on review of the ruling on his post-trial motion any point, ground or relief not particularly specified in the motion.” Section 68.1(5) provides “Any party who fails to seek a new trial in his post-trial motion, either conditionally or unconditionally, as herein provided, waives the right to apply for a new trial, except in eases in which the jury has failed to reach a verdict.”

Plaintiff argues that the ruling of the trial court on a motion for directed verdict is a decision made in the progress of the trial and subject to review by a court of appeal without a motion for a new trial. In our opinion this argument begs the question. Were we to review the lower court’s ruling on the motion for directed verdict and find such ruling in error, this, in itself would be of no benefit to Plaintiff. Plaintiff desires further that we grant him the relief of a new trial and this we cannot do in the absence of a post-trial motion praying for such relief. Section 68.1 (2) and (5) we deem to be mandatory. (Knab v. Alden’s Irving Park, Inc., 49 Ill App2d 371, 199 NE2d 815; County Board of School Trustees of Macon County v. Batchelder, et al., 7 Ill2d 178, 130 NE2d 175, and Perez v. The Baltimore & Ohio R. Co., et al., 24 Ill App2d 204, 164 NE2d 209.) Since we find that Plaintiff’s appeal as to Defendant Phillips Petroleum Company must fail for his failure to request a new trial in the lower court, it is unnecessary to consider Plaintiff’s other points as regards this Defendant.

With respect to Plaintiff’s appeal from the order allowing judgment notwithstanding the verdict or, in the alternative, a new trial, as moved by Defendant, Brown Oil Co., other principles must control. The rules governing what a court may consider on a motion for judgment notwithstanding the verdict have been often stated and are well settled. “. . . the sole question presented to the court is whether, admitting the evidence in favor of the Plaintiff to be true, that evidence, together with all legitimate conclusions and inferences fairly tends to sustain Plaintiff’s cause of action. We have no right to pass upon the credibility of the witnesses, to consider any purported impeachments, the weight thereof, or the weight of the testimony, since the motions admit the evidence in favor of Plaintiff to be true, together with all legitimate conclusions and inferences. Viceeli v. Cummings, et al., 322 Ill App 559, 54 NE2d 717.” Elbers v. Standard Oil Co., 331 Ill App 207, 72 NE2d 874. (For the same conclusion see also Stegmann v. Zachariah, 46 Ill App2d 7, 196 NE2d 703; Sollars v. Blayney, 31 Ill App2d 341, 176 NE2d 477, and Freisland v. City of Litchfield, 24 Ill App2d 390, 164 NE2d 606.)

In the instant case there was evidence tending to show that the care and control of the pole were with Defendant, Brown Oil Company, that the pole had deteriorated to the point of being unsafe, and that as a result of this defect Plaintiff was injured. There was also evidence showing what Brown Oil Company had done to determine the condition of this pole, what Plaintiff had done to determine the safety of his operation and that the defeet as later disclosed, was latent at the time of the accident.

The court below based its opinion and Defendant heavily relies on National Builders Bank of Chicago v. Schuham, 319 Ill App 546, 49 NE2d 825. In the Sehuham case, Plaintiff, while scraping window frames and sashes preparatory to painting, supported part of his weight on the top sash. This sash broke causing Plaintiff to lose his balance and fall, resulting in his injuries. It appeared after the accident that the wood in the sash in question had rotted. The court in reaching its conclusion, held specifically that it would not consider the possible contributory negligence of Plaintiff but preferred to base its decision on Plaintiff’s total lack of proof of Defendant’s negligence. In so holding the court stated “Under the facts of this case it must be held as a matter of law that the defendant was not guilty of negligence unless it was his duty in the (exercise) of reasonable care to take or saw apart the lower bar of the sash in question to discover whether it has rotted on the inside before he permitted decedent to paint or prepare to paint said sash. Defendant was under no such duty. To hold the owner liable under the circumstances shown here would place upon him an unreasonable burden which the law does not do.”

It is obvious from the quotation in the Schuham case as well as Weintraub v. John B. Sexton, 327 Ill Appp 348, 64 NE2d 235, that no duty exists on the part of the owner of property toward an invitee with respect to uses for which the property was not intended or designed or for a use not reasonably anticipated. Thus where no duty exists no question of care arises. Where the manner of use by the invitee is one which the owner should reasonably expect or anticipate, in connection with the invitation, however, the owner has a duty of ordinary care to see that the premises are in a reasonably safe condition for such use. This principle is illustrated in Houlihan v. Sulzberger, 282 Ill 76, 118 NE 429, where the court held that the ladder used was intended to support the weight of a person and that consequently the care which the owner exercised in carrying out its duty was appropriately a question of fact for the jury. In the instant case we believe that the owner of the pole either knew, should have known or should have anticipated that in the repair or maintenance of the upper portion of the pole such pole might be required to support the weight of a person standing on a ladder leaning against the pole. Hendricks v. Socony Mobile Oil Co., 45 Ill App2d 44, 195 NE2d 1. There was, therefore, a duty upon the part of Defendant, Brown Oil Co., to inspect the pole in order to ascertain whether it was safe for this anticipated use. Whether Defendant reasonably performed that duty was a question of fact for the jury. There is evidence in the record such as the Defendant’s knowledge of the age of the pole, its composition, its prior condition as well as Defendant’s inspection or lack thereof, from which it could reasonably be inferred that Defendant was negligent. These questions should have been and were determined by the jury in the verdict which it returned. The trial court was in error in granting Defendant’s motion for judgment notwithstanding the verdict.

This leaves us with the alternative in the order of the trial court granting Defendant a new trial. Under section 68.1(6) of the Civil Practice Act (c 110, § 68.1 (6), Ill Rev Stats 1965) we are required, where the unconditional rulings of the trial court, on a post-trial motion, have been held erroneous, to review the propriety of the conditional ruling. The reasons assigned by the trial judge here, for granting a new trial in the event the judgment n. o. v. should be reversed, were merely that the verdict was contrary to the manifest weight of the evidence, and to the law. As discussed previously, however, the trial court was in error in applying the law regarding latent defects to this case. No other reasons being given in support of this conditional ruling, and none being argued by the parties, we conclude that the alternative order for a new trial is also erroneous.

Accordingly the order of the Circuit Court of LaSalle County granting Defendant judgment notwithstanding the verdict or in the alternative for a new trial is hereby reversed and the cause remanded to said court with directions to enter judgment on the verdict.

Reversed and remanded with directions.

CORYN, P. J. and ALLOY, J., concur.


author: GOLDENHERSH, P. J.

text:
    Harold Arendt, Plaintiff-Appellee, v. Bennie McClerren, Defendant-Appellant.
    Gen. No. 66-40M.
    Fifth District.
    September 10, 1966.

      Joseph W. Hickman, of Benton, for appellant.
    Frank E. Trobaugh and Stephen E. Brondos, of West Frankfort, for appellee.
   GOLDENHERSH, P. J.

Defendant appeals from the judgment of the Circuit Court of Franklin County. The cause was heard by the trial court without a jury, and the appeal is governed by the provisions of Supreme Court Rule 36-1. The amount of the judgment from which defendant appeals is $750.

The complaint alleges that plaintiff purchased a quarter horse owned by defendant for the sum of $750. Plaintiff alleges that the horse was purchased through Harold Baker, whom he describes as defendant’s agent, that the horse was not as warranted, that he advised defendant that the horse was crippled, that with defendant’s approval he obtained treatment for the horse by a veterinarian, that the horse did not respond to treatment and that he and defendant agreed that the horse should be returned to defendant, and plaintiff’s money refunded. The complaint was verified, and in a verified answer defendant admits Baker was his agent, denies the allegations of warranty, denies the horse was crippled, admits the horse was returned, and admits further that plaintiff would be entitled to some refund, but not $750.

The evidence as to the horse’s condition at the time he came into plaintiff’s possession, and at the time of his being returned to defendant, is conflicting. Defendant admitted that he had told plaintiff to return the horse and he would refund all but $100 of the purchase price, and testified that the horse was in such poor condition when returned, that only after considerable care and treatment was he able to sell the horse for $250.

Defendant’s principal contention on appeal is that the trial court erroneously refused to permit him to amend his answer and deny that Baker was his agent. The motion for leave to amend the answer was made during the presentation of defendant’s evidence, and was renewed at the close of the defendant’s case. The court denied the motion and in an opinion and memorandum states that the admission of agency in defendant’s answer is conclusive upon defendant, and any evidence tending to dispute the fact thus admitted should not be considered, and for that reason “the contention of the defendant that the pleading can be amended to conform to the proof has no application.”

The trial court is in error in concluding that the answer cannot be amended. Such amendment is permissible under the provisions of the Civil Practice Act, and the motion for leave to amend is addressed to the sound discretion of the court. Satorius v. Boeker, 330 Ill App2d 512, 71 NE2d 851; Martin v. Kozjak, 5 Ill App2d 390,125 NE2d 690.

This court is unable to determine whether, absent the ruling that defendant’s answer constituted a judicial admission and could not be amended, the court would hold that Baker was defendant’s agent, or whether any other finding of fact was affected by the ruling. Justice requires that the trial court reconsider the case in the light of his having the power, in his discretion, to permit the amendment.

It does not follow, however, that a new trial must be granted. C 110, § 92(e), Ill Rev Stats 1965, provides that a reviewing court may make any order or grant any relief, including a remandment, that the case may require. Upon remand, if, in the exercise of his discretion, the trial court were to deny the motion for leave to amend the answer, a new judgment for plaintiff can be entered, based on the evidence already adduced. If the trial court permits the amendment, plaintiff should be given an opportunity to offer additional evidence on the issue of agency, if he desires so to do. The trial court can then make findings and enter an appropriate judgment. In either event, it will not be necessary to burden the court and the litigants with the expenditure of time and money incident to a complete new trial.

For the reasons herein stated, the cause is remanded to the Circuit Court of Franklin County for further proceedings consistent with this opinion.

Cause remanded with directions.

MORAN and EBERSPACHER, JJ., concur.


text:
    Raymond T. Wyer, Plaintiff-Appellee, v. McKeown-Phalin Chevrolet, Inc., a Corporation, Defendant-Appellant.
    Gen. No. 65-159. (Abstract of Decision.)
    Second District.
    August 30, 1966.
    Henry H. Caldwell, of Chicago, for appellant; Harry S. and Fred S. Posner, of Chicago, for appellee.
   Opinion by PRESIDING JUSTICE MORAN. Not to be published in full.


author: MR. JUSTICE DAVIS

text:
    Edith Kritzer Paulman, Plaintiff-Appellee, v. Henry E. Kritzer, Kritzer Radiant Coils, Inc., a Delaware Corporation, Batavia-Kritzer, Inc., a Delaware Corporation, Courtland G. Newton and Manfred A. Lucchese, Defendants-Appellants.
    Gen. No. 65-121.
    Second District.
    September 1, 1966.

      George B. Christensen and R Lawrence Storms, of Chicago (Winston, Strawn, Smith & Patterson, of counsel), for appellants.

      Harold J. Keele and Halbert 0. Crews, of Chicago, for appellee.
   MR. JUSTICE DAVIS

delivered the opinion of the court.

This suit was instituted by the plaintiff and her sister as a stockholders’ derivative suit for the benefit of the defendant, Kritzer Radiant Coils, Inc., a Delaware Corporation, herein called KRC. The plaintiff contends that her brother, the defendant Henry E. Kritzer, Sr., herein called Kritzer, violated the fiduciary duty owed by him to KRC as an officer and director in seizing certain corporate opportunities for his own benefit. The plaintiff’s sister withdrew from the case before testimony was heard before the Special Master.

Since 1954 Kritzer has been president and a member of the Board of Directors of KRC and has owned 50% of its outstanding stock, and the plaintiff and her sister have each owned 25%. At the stockholders’ meeting on February 20, 1956, a deadlock developed in the election of directors when Kritzer refused to vote to elect a representative of the plaintiff. Since that time no further meetings of the shareholders were called or held and the same directors have continued in office. Since such deadlock, the personal relations of the shareholders have deteriorated and they have sought recourse through litigation.

The corporation was engaged in the business of manufacturing and selling heating equipment. Its quarters in 1954, located at 2901 Lawrence Avenue, Chicago, were inadequate for various reasons and it was searching for a more suitable location. In October of 1954, Kritzer, individually, purchased on contract for the sum of $126,400 certain unimproved real estate known as the Ebertt tract, for the purpose of solving KRC’s housing and location problem. The down payment and the installment contract payments in the sum of $82,950 — being all of the payments due on said contract to the date of the sale of the tract by Kritzer — were made from KRC funds. In August of 1957, Kritzer sold this property for a gross profit of $140,515.25, which he personally retained.

In October of 1955, Kritzer, individually, also purchased on contract for $45,000 a smaller parcel of land which adjoined the Ebertt tract, for the same purpose. This real estate is referred to as the Bulaw tract. The down payment and the first two semiannual installment contract payments were made by Kritzer from KRC funds. The funds invested in such real estate were carried on the KRC books as “Advances to Officers.” Shortly after his sale of the Ebertt tract, Kritzer repaid to KRC $82,950, as well as an additional $7,403.22 which apparently was interest on such sum, although no explanation was given as to what the rate was or how it was determined. No part of the profit made by Kritzer on the sale of the Ebertt tract was turned over to KRC, and he still retains title to the Bulaw tract.

Early in 1956, Union Asbestos and Rubber Company, hereinafter called UN ARCO, contracted KRC for the purpose of selling its heating division to KRC. An investigation of this proposal was made by KRC, and it was concluded that the equipment of the heating division would supplement that already owned by KRC and that its products would complement those of KRC. The officers of KRC decided that it would be advantageous to purchase this division of UN ARCO. Subsequently, Kritzer organized Batavia-Kritzer, Inc., herein called B-K, a Delaware Corporation, with a capitalization of $1,000. He held all of its capital stock and was its president and one of its three directors. Courtland G. Newton — also a director of KRC — was one of the directors, as was Kritzer’s son, Henry E. Kritzer, Jr. Kritzer then personally purchased substantially all of the assets of the heating division of UNARCO, including its inventory of raw materials, machinery, equipment, tools, dies and jigs. As a part of this transaction, UNARCO assigned to Kritzer its rights as the lessee of certain premises used by its heating division, for manufacturing purposes. Kritzer then reassigned those interests to B-K, remaining personally liable on all of B-K’s obligations to UNARCO. Over the next five to six years, KRC paid all or substantially all of B-K’s purchase price for these assets to B-K as rental for the equipment and machinery, and also paid to B-K rental for the use of the manufacturing facilities located on the leased premises. KRC never acquired title to any of this property, which, at the end of this period, had considerable value.

The Master recommended that Kritzer be held to account to KRC for his net profits on the purchase and sale of the Ebertt tract; that he convey to the corporation the Bulaw tract — the title thereto still being vested in him; and that he convey all of his stock in B-K to KRC, all subject to credit for his payments on the realty still owned, his contributions to the capital of B-K, and to indemnification for personal liability on the purchase of UNARCO’s assets. The trial court approved and adopted the findings and orders of the Master.

KRC is a Delaware Corporation, and Delaware law, with respect to the fiduciary duties of a corporation’s officers and directors, is controlling. National Lock Co. v. Hogland, 101 F2d 576, 579 (CA 7th, 1939). It is almost universally recognized that the directors and officers of a corporation occupy a fiduciary relation toward it. Shlensky v. South Parkway Bldg. Corp., 19 Ill2d 268, 278, 166 NE2d 793 (1960). This standard is succinctly set forth in Loft, Inc. v. Guth, 23 Del Ch 138, 2 A2d 225 (1938) at pages 238 and 239 in the following language:

“Such are the fiduciary duties and obligations of an officer and director of a corporation that if a business opportunity comes to him which is in the line of his corporation’s activities and of advantage to it and especially if really intended for it, the law will not allow him to divert the opportunity from the corporation and embrace it as his own. If he does so, the corporation has a right to claim the benefits of the opportunity for itself and to impress the property which the director and officers received together with all profits thereon with a trust in its favor.”

In the case at bar it is conceded that KRC was in need of and searching for a new location. The real estate purchased by Kritzer — both the Ebertt tract and the adjoining Bulaw tract — was intended for the use of KRC. The availability of the real estate came to the knowledge of Kritzer while searching for property for KRC. The funds of KRC financed the purchase of the Ebertt tract and were used to make the down payment and all semiannual payments thereon — in the sum of $82,958 — up to the time when Kritzer sold the property. KRC funds were also used to pay a considerable portion of the purchase price of the Bulaw tract; namely, the down payment and additional contract payments in the sum of $22,000. These factors clearly bring the transactions within the corporate opportunity doctrine.

As to UNARCO, it is conceded that it approached an officer of KRC, suggesting that KRC acquire its heating division; and that the acquisition would be advantageous to KRC. Again, the evidence indicates that KRC ultimately paid for the purchase of the UNARCO division. In the spring of 1956, Kritzer entered into a contract to purchase the assets of UNARCO heating division including a leasehold interest in a manufacturing plant in Batavia, on a time basis, the total ultimate obligation being in excess of $550,000. These assets were transferred from UNARCO directly to B-K, which then commenced operations at the Batavia plant.

KRC advanced $45,000 to B-K to enable it to commence operations and B-K then began to manufacture certain items previously manufactured by KRC. KRC also manufactured and sold to B-K, at 85% of the regular sale price, certain other items, thereby enabling B-K to resell at a profit. KRC further advanced other funds to B-K with the result that by December 31, 1956, B-K owed approximately $190,000 to KRC. By June 30, 1957, B-K had accounts payable to KRC totalling $352,000, and accounts receivable from KRC in the sum of $88,600.

In December of 1956, KRC bought all of B-K’s inventory and work in progress valued at $415,000. B-K retained title to the machinery, tools and dies, as well as the leasehold interest. From January 1, 1957 to November 1, 1963, KRC paid B-K, $381,600 rental for B-K’s equipment and machinery. The total purchase price paid by B-K to UNARCO for these items was $298,750. During the same period of time, KRC paid to B-K, $392,400 rental for the UNARCO premises and B-K paid UNARCO $331,200 for the same premises under lease to it. These circumstances likewise clearly bring these transactions within the corporate opportunity doctrine.

This doctrine is but one of the manifestations of the general equitable rule which demands of an officer or director of a corporation the utmost good faith and loyalty in his relations to the principal which he represents, and requires an undivided and unselfish loyalty to the corporate principal without conflict between this duty and the self-interest anticipated of human nature. The rule, described as inveterate and uncompromising in its rigidity, rests upon the broad foundation of a wise public policy that, for the purpose of removing all temptation, extinguishes all possibility of profit flowing from a breach of the confidence imposed by the fiduciary relation. Guth v. Loft, Inc., 23 Del Ch 255, 5 A2d 503, 510, 511 (1939); Pelcak v. Bartos, 328 Ill App 435, 66 NE2d 465 (1st Dist 1946); 3 Fletcher Cyc Corp, § 861 (1965 Ed).

In Henry’s Drive-In, Inc. v. Anderson, 37 Ill App2d 113, 185 NE2d 103 (1st Dist 1962), the court, at page 123, in quoting from Guth v. Loft, Inc., 28 Del Ch 255, 5 A2d 503, 511, set forth the scope of corporate opportunity and the remedies imposed by law:

“. . . if there is presented to a corporate officer or director a business opportunity which the corporation is financially able to undertake, is, from its nature, in the line of the corporation’s business and is of practical advantage to it, is one in which the corporation has an interest or a reasonable expectancy, and, by embracing the opportunity, the self-interest of the officer or director will be brought into conflict with that of his corporation, the law will not permit him to seize the opportunity for himself. And, if, in such circumstances, the interests of the corporation are betrayed, the corporation may elect to claim all of the benefits of the transaction for itself, and the law will impress a trust in favor of the corporation upon the property, interests and profits so acquired .... (Citing cases.)”

Kritzer seeks to avoid the trust impressed in favor of the corporation by asserting that he acted in good faith in undertaking these transactions and that KRC was not financially able to make the acquisitions without sacrificing its valuable banking connection.

As to the question of good faith, it was incumbent upon Kritzer to show it. It was not plaintiff’s burden to show an absence of good faith. He must show that his every act in dealing with the opportunities presented was in the exercise of the utmost good faith. Henry’s Drive-In, Inc. v. Anderson, supra, 123. We be- ■ lieve that the facts recited herein sufficiently show the absence of the utmost good faith and responsibility required of Kritzer in his fiduciary capacity.

As to the financial inability of KRC to assume these obligations, the facts again belie the contention. They show that KRC was, in fact, able to assume the financial obligations in that it was solvent and financially sound and ultimately supplied the funds used in both the real estate and UN ARCO transactions. Although the obligations were assumed by Kritzer individually, and title to the various assets taken in his name — either individually or through his wholly-owned corporation, B-K — the monies used to finance the ventures came, in one form or another, from KRC.

Kritzer contends that the UN ARCO acquisition took the form it did because it could only be made on his personal obligation. The evidence does not support this assertion. Kritzer further claims that KRC would have lost its “very valuable banking connection” had it not undertaken these various transactions in the manner it did. However, we do not believe that the evidence warrants this conclusion. At the time of the real estate transactions, KRC did not owe this banking connection one penny. Nor do we believe that this banking connection, or any other worthy of the trust vested in it by KRC, would look with favor upon setting up these transactions in such manner that KRC would pay for the various assets and yet not reap the benefits or profits therefrom.

The inherent dangers of permitting a corporate officer or director to seize upon an opportunity on the grounds that the corporation is financially unable to do so, at a time when the corporation is solvent, is recognized in Irving Trust Co. v. Deutsch, 73 F2d 121 (CA 2nd, 1934) where the court, at page 124 stated:

“If directors are permitted to justify their conduct on such a theory, there will be a temptation to refrain from exerting their strongest efforts on behalf of the corporation since, if it does not meet the obligations, an opportunity of profit will be open to them personally.”

The philosophy underlying this concept was stated classically by Judge Cardozo, in these words:

“A trustee is held to something stricter than the morals of the market place. Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate. Uncomprising rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the ‘disintegrating erosion’ of particular exceptions.” Meinhard v. Salmon, 249 NY 458, 464, 164 NE 545, 546 (CANY 1928).

Where a business opportunity is presented to an officer in his individual capacity, rather than in his official capacity as an officer or director, and the opportunity is one not essential to the corporation nor in which the corporation has any interest or expectancy, the opportunity is that of the officer and not of the corporation. Loft, Inc. v. Guth, 23 Del Ch 138, 2 A2d 225, 239 (1938). The test of whether a particular opportunity is an individual or corporate one “seems to be whether there was a specific duty, on the part of the officer sought to be held liable, to act or contract in regard to the particular matter as the representative of the corporation — all of which is largely a question of fact.” 3 Fletcher Cyc Corp, § 862 (1965 Ed).

Whether a corporate officer has seized a corporate opportunity for his own depends not on any single factor nor is it determined by any fixed standard. Numerous factors are to be weighed, including the manner in which the offer was communicated to the officer; the good faith of the officer; the use of corporate assets to acquire the opportunity; the financial ability of the corporation to acquire the opportunity; the degree of disclosure made to the corporation; the action taken by the corporation with reference thereto; and the need or interest of the corporation in the opportunity. These, as well as numerous other factors, are weighed in a given case. The presence or absence of any single factor is not determinative of the issue of corporate opportunity.

This question is determined by a consideration of all of the factors in light of the public policy upon which the duties of a fiduciary are based. In Farwell v. Pyle-National Elec. Headlight Co., 289 Ill 157, 124 NE 449 (1919), the court, on page 165, quoted from Michoud v. Gerod, 4 How 503, 555, 11 L Ed 1071, as follows:

“The general rule stands upon our great moral obligation to refrain from placing ourselves in relations which ordinarily excite a conflict between self-interest and integrity. ... In this conflict of interest the law wisely interposes. It acts, not on the possibility that in some cases the sense of that duty may prevail over the motives of self-interest, but it provides against the probability in many cases, and the danger in all cases, that the dictates of self-interest will exercise a predominant influence and supersede that of duty.”

The only safe assumption in such a case is that self-interest rather than a sense of duty will be the motivation for the ensuing action. Loft, Inc. v. Guth, 23 Del Ch 138, 2 A2d 225, 239 (1938).

The basis of the corporate opportunity doctrine rests fundamentally on the unfairness, in particular circumstances, of an officer or director, whose relation to the corporation is fiduciary, taking advantage of an opportunity for his own personal profit when the interest of the corporation justly calls for protection. The resolution of such question calls for the application of ethical standards of what is fair and equitable in a given situation. Durfee v. Durfee & Canning, Inc. (Mass), 80 NE2d 522, 529 (1948).

We find it difficult to accept the contention that Kritzer may claim the right to the $140,515.25 profit received on the sale of the Ebertt tract some three years after it was purchased at a price of $126,400 for KRC and with KRC funds. The same rationale applies to the Bulaw tract which was purchased for KRC and, to a large extent, with KRC funds. Under the circumstances of this case, we likewise cast an incredulous look upon the suggestion that Kritzer is entitled to any of the benefits or profits which have inured to B-K through its purchase of the UNARCO division.

UNARCO initially sought to sell its heating division to KRC; such division was in the line of KRC’s business and constituted a practical advantage to it; the business was closely associated with and suited to the existing business activities of KRC; KRC had fundamental knowledge of the business which UNARCO desired to sell, had practical experience therein and the ability to pursue and develop it; and there is no evidence that UNARCO would have refused to sell to KRC.

The contention that KRC was not financially able to seize this opportunity is not particularly compelling in view of its solvency and financial stability at the time, the terms of the purchase agreement, and the manipulated financial transactions which took place between KRC and B-K. The evidence does not indicate that KRC was unwilling or unable for any business reason, no matter how specious, to enter into the transaction with UNARCO. The executive and management force of B-K was largely that of KRC; and Kritzer, the president, director and controlling officer of KRC, was the sole shareholder of B-K and compelled KRC to enter into the unprofitable lease-rental arrangements with B-K, which inured to the profit of B-K and the deteriment of KRC. The record further indicates that it was KRC, which in all essential respects, supplied the management, resources and opportunities which made B-K grow and prosper.

It cannot be denied that Kritzer occupied a fiduciary position and owed an obligation to KRC to develop corporate opportunities for it and on its behalf, and to refrain from doing anything which might work injury to KRC or deprive it of profit or advantage which his skill, knowledge and ability might personally bring to it or enable it to realize in the reasonable exercise of its capacities and powers.

The decree of the trial court is, accordingly, affirmed.

Decree affirmed.

MORAN, P. J. and ABRAHAMSON, J., concur.


text:
    The People of the State of Illinois, Plaintiff-Appellee, v. John Vaseska, Defendant-Appellant.
    Gen. No. 66-27. (Abstract of Decision.)
    Fifth District.
    September 7, 1966.
    Alan J. Dixon, of Belleville, for appellant; Floyd E. Crowder, State’s Attorney of Monroe County, of Waterloo, for appellee.
   Opinion PER CURIAM. Not to be published in full.


text:
    The People of the State of Illinois, Plaintiff-Appellant, v. James Krumery, Defendant-Appellee.
    Gen. No. 66-35.
    Fifth District.
    September 8, 1966.
    K. T. Hubler, State’s Attorney, of Marion, for appellant.

      Gordon Lambert, of Marion, for appellee.
   GOLDENHERSH, P. J.

The People appeal from the judgment of the Circuit Court of Williamson County quashing a warrant, dismissing a complaint and discharging the defendant.

The facts, as stipulated, are that on January 10, 1966, the State’s Attorney of Williamson County interviewed Jo Carol Krumery, the complaining witness, and based upon information obtained, prepared a criminal complaint charging that defendant “did knowingly act in such an unreasonable manner as to alarm the complainant herein, Jo Carol Krumery, and to provoke a breach of the peace.” The complaint is signed by the complaining witness and acknowledged before a notary public, who is not an associate circuit judge or magistrate, her only official position being that of a notary.

After the complaint was signed and sworn to, it was presented to an associate circuit judge, who heard no testimony, and solely upon the basis of his having examined the verified complaint, ordered a warrant to issue.

Defendant was arrested, furnished bail, and moved to quash the complaint and warrant on the grounds that the complaint could not be verified before a notary public who was neither a judge nor magistrate, and the warrant could not issue solely on the basis of the court’s having examined the verified complaint, and without the court first having heard evidence as required by statute. The court heard argument on the motion, entered the order and judgment above described, and The People appeal.

The People contend that the verification of a complaint before a notary public meets the requirement of section 107-9 (b) (4) of the Code of Criminal Procedure of 1963 (c 38, § 100-1 et seq., Ill Rev Stats 1965). In Village of Willowbrook v. Miller, 72 Ill App2d 30, 217 NE2d 809, the Appellate Court for the Second District speaking through Mr. Justice Thomas J. Moran said, “Therefore, we are of the opinion that the Statute allows verification before any officer empowered to administer oaths. A complaint verified before a notary public satisfies the Statutory requirement and is sufficient to sustain a criminal prosecution.” We agree with our colleagues in the Second District and hold that a complaint subscribed by the complainant and sworn to before a notary public is sufficient to meet the statutory requirement.

The People contend that the word “shall” as used in section 107-9 (a), should be construed as “may,” and the word “and” as used in section 107-9 (c) should be construed as “or.” This argument is based on the provisions of section 107-10 which provides: “A warrant of arrest shall not be quashed or abated nor shall any person in custody for an offense be discharged from such custody because of technical irregularities not affecting the substantial rights of the accused.”

With this contention we cannot agree. The language of section 107-9 (a) is clear and unequivocal and requires that upon presentation of the complaint the court “shall examine upon oath or affirmation the complainant or any witnesses.” The language of section 107-9 (c) is equally clear that the warrant is to be issued only “if it appears from the contents of the complaint and the examination of the complainant or other witnesses,” that the person charged has committed an offense. As to section 107-10 we need not discuss its applicability to the irregularity of which defendant complains, nor what the General Assembly intended to include in the term “technical irregularities.” The right to be arrested on a warrant issued only after there has been full compliance with the provisions of sections 107-9 (a) and 9 (c) is one of the “substantial rights of the accused,” and is entitled to every protection provided by statute.

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

Judgment affirmed.

MORAN and EBERSPACHER, JJ., concur.