text:
    Donna Jean Sears, et al., Plaintiff-Appellant, v. First Federal Savings and Loan Association of Chicago, Defendant-Appellee.
    (No. 55229;
    First District
    September 21, 1971.

      Edward Atlas and Harold A. Harris, of Chicago, for appellant.
    Sidley & Austin, of Chicago, (John M. Clark, William H. Avery, Howard Neitzert and George A. Platz, of counsel,) for appellee.
   Mr. JUSTICE GOLDBERG

delivered the opinion of the court:

Plaintiff filed an amended complaint in chancery individually and on behalf of all mortgage borrowers from First Federal Savings and Loan Association of Chicago (defendant). Plaintiff sought an accounting in behalf of the class on the theory that certain money paid to defendant constituted a trust, the earnings of which should inure to the benefit of the class. The trial court sustained a motion to dismiss filed by defendant, considering only one of several stated grounds. Plaintiff appeals.

The amended complaint alleges in substance that defendant is a corporation organized under the laws of the United States. It has for many years operated a savings and loan association and has loaned money to various persons evidenced by notes of the borrowers secured by real estate mortgages. In April of 1964, plaintiff obtained a loan from defendant to finance purchase of a home. Plaintiff executed a form of note used by defendant, together with a mortgage on the property. Since the controversy centers about certain language in the note, we reproduce the pertinent portions in full:

“In order to provide for the payment of taxes, we promise to pay monthly in addition to the above payments, one-twelfth of the annual real estate taxes as estimated by the Association, in such manner as the Association may prescribe, so as to provide for the current year’s tax obligation on the last day of each such year during the term of this obligation. We promise, further, to pay monthly a pro-rata share of all assessments, future hazard insurance premiums and any other charges that may accrue against the property securing this indebtedness. If the amount estimated to pay said taxes, insurance, assessments, and other charges is not sufficient, we promise to pay the difference upon demand. It is agreed that all such payments may, at the option of the Association (1) be held in trust by it without earnings for the payment of such items; (2) be carried in a borrower’s tax and insurance account and withdrawn by the Association to pay such items; or (3) be credited to the unpaid balance of said indebtedness as received, provided that the Association advances upon this obligation sums sufficient to pay said items as the same accrue and become payable. If such sums are held in trust or carried in a borrower’s tax and insurance account, the same are hereby pledged together with any other account of the undersigned in the Association to further secure this indebtedness and any officer of the Association is authorized to withdraw the same and apply thereon. The Association is authorized to pay said items as charged or billed without further inquiry.”

The amended complaint further alleges that those persons who borrowed money from defendant executed notes with the same, or substantially the same, provisions. It is alleged that the defendant exercised the second option, set forth above, to carry the payments, “* * * in a borrower’s tax and insurance account ® * About the time of the filing of the amended complaint, these accounts for various borrowers contained a total of some $19,000,000.

The essence of the amended complaint is then set forth to the effect that the defendant has received these monthly payments from plaintiff and all other borrowers as a trustee and fiduciary which imposed upon defendant a duty to segregate the trust funds and to account to plaintiff and other borrowers for all earnings and profits resulting from the funds. It is alleged that defendant has violated its duty as trustee by commingling these funds with its general assets and by earning large amounts of money therefrom so that defendant has become unjustly enriched by sums which should accrue to the benefit of plaintiff and the entire class.

The amended complaint also contains allegations describing the class and purporting to show the necessity for a class action and that plaintiff’s representation of the class will be fair. The amended complaint prays declaratory relief to fix the status of the payments in question as trust funds; the taking of an accounting regarding profits obtained from use of the trust funds and ancillary relief such as the appointment of a receiver to collect the sums which may be found due and allowance of various fees and expenses.

The motion to dismiss the amended complaint specifies seven grounds. Paragraph number seven states that the provisions of the note are not sufficient in law or in equity to impose trust obligations upon defendant and that defendant was not otherwise required to distribute earnings to borrowers. The trial court held that this ground was ample and that it was not necessary to decide others. We will consider this stated ground first.

The problem here is the true meaning of the cited language of the promissory note. It is plaintiff’s contention that exercise by defendant of the second option above described created a trust fund. Plaintiff argues ably and tenaciously that the language of the second option created a special deposit of money to be used for a specifically designated purpose and that this is sufficient to create a trust. Plaintiff urges that since the note provides that the funds in the borrower’s tax and insurance account were to be pledged to secure the indebtedness created by the note, another ground exists for creation of a trust. However, with equal ability and tenacity, defendant argues that no trust is created by the language of the second option and that a pledge is not a trust. Each sidet stoutly maintains that the authorities cited in support of the contrary position may be differentiated with ease and with finality.

Before embarking upon analysis of these conflicting claims, we will pause briefly to define our terms. We define an express trust as “* * * one which is created in express terms in the deed, writing or will, or which arises from the direct and positive action of the parties evidenced by a written instrument * * °.”(35 I.L.P. Trusts § 4 at 176.) We define an implied trust as one which, “* * * is deducible from the nature of the transaction between the parties, or which is superimposed on the transaction by operation of law, independently of the intention of the parties.” (35 I.L.P. Trusts § 4 at 177.) Implied trusts may be further categorized into constructive and resulting trusts. Murray v. Behrendt, 399 Ill. 22, 27.

All trusts of every kind are necessarily included within these two general classifications of express and implied. Although the term, “implied trust” has been used to designate an express trust arising from the construction of language in a document, it seems to us that it is preferable to define the trust which would arise in such situations as an express trust. Thus, if option two in the promissory note were declared to create a trust, this trust should, in our opinion, be classified as an express trust. The trust would actually arise from construction of the document or by implication from the language used; but, properly speaking, it should be classified as an express trust as differentiated from an implied trust. See: Bogert, Trusts and Trustees (2nd ed. 1964), § 451.

We must arrive at the meaning of the second option from an examination of the language used in the document. As plaintiff urges, construction of the note is, “a pure question of law” for this court; to be determined “s * * from the clear language of the mortgage pro-

vision.” However, in this process, we must examine all of the pertinent language of the note itself as above quoted. We cannot give effect to portions of the note only. Each clause and all of the language used must, if possible, be given meaning, life and effect. (J. & R. Electric Co. v. Edward P. Allison Co., Inc., 125 Ill.App.2d 123, 130; Bowler v. Metropolitan Sanitary District, 117 Ill.App.2d 237, 242; Donahue v. Rockford Showcase & Fixture Co., 87 Ill.App.2d 47, 51.) In addition, we must consider the background of the transaction befort the court. In this context, the motion to dismiss is deemed to admit aH facts properly pleaded in the amended complaint. Acorn Auto Driving School, Inc. v. Board of Education, 27 Ill.2d 93, 96; Follett’s Illinois Book & Supply Store, Inc. v. Isaacs, 27 Ill.2d 600, 603; Country Mutual Insurance Co. v. Drendel, 116 Ill.App. 2d 466, 470; Martin v. Po-Jo, Inc., 104 Ill.App.2d 462, 468.

We commence by noting carefuHy the first few words expressed in the second option; namely, the words “* ® 0 be earned in a borrower’s tax and insurance account * * Webster’s Second New International Dictionary cites 23 separate meanings for the verb “to carry”. In the light of the background of this transaction, it seems most reasonable to define the word as “to keep on one’s books as a debtor.” The phrase “carry on the books” is common in legal as well as in banking circles. We also note in this connection that three words are significantly omitted from use in conjunction with the verb “carry”. The note could have stated that this tax and insurance account would be “segregated” “separated” or even “isolated”. None of these terms are used. Their absence shows a lack of direction and intent that this tax and insurance account be treated as a special deposit.

It is true that the funds of this borrower’s tax and insurance account are intended to be used primarily for a specific purpose; namely, the payment of taxes and insurance premiums. However, the final sentence of the pertinent language of the note authorizes defendant to pay these items, “* * * as charged or billed without further inquiry * # In addition, in the immediately preceding sentence, the document specifically pledges the tax and insurance account as further security for the indebtedness created by tire note and authorizes any officer of defendant to withdraw from the account for that purpose. These additional provisions indicate that the payments made by the borrower are to be devoted to payment of the main indebtedness as well as to payment of taxes and insurance. We have, therefore, a situation in which the payments are not to be segregated or separated but merely carried on the books. These sums in effect are to be applied to payment of taxes or insurance or on account of the indebtedness; subject only to the condition that the defendant assures payment of all taxes and insurance as they become due. In effect these monthly payments by plaintiff and other borrowers were made unconditionally and coupled with a contractual obligation upon defendant to make payment of taxes and insurance, to the extent of available payments made by the borrower.

It is agreed that the borrower on a note makes monthly payments in a single sum to the defendant. These entire payments are deposited to the general funds of defendant but credits are entered on defendant’s books to the borrower’s tax and insurance account as well as to the main indebtedness, interest and principal. Upon consideration of all of the above circumstances, we conclude that the monthly sums paid to defendant are not deposits in any legal sense of that term but they are simply payments by a debtor upon amounts due to the creditor.

These terms “deposit” and “payment” have a variety of legal meanings. However, one attribute of a deposit is that the depositor retains a right, generally under stated circumstances, to receive back all or part of the deposit or its equivalent; quite analogous to the rights of a creditor. (People ex rel. Housing Authority v. Hursey, 7 Ill.2d 537, 544; Gits v. Foreman, 360 Ill. 461, 470-71; People ex rel. Russel v. Michigan Avenue Trust Co., 232 Ill.App. 456, 458.) In payment, the money is delivered to the creditor and the debtor receives simply satisfaction of the debt; either pro tanto or in full as the case may be. United States v. Isthmian Steamship Co., 359 U.S. 314, 318; People ex rel. Brown v. Stelle, 361 Ill. 45, 49-50; 70 C.J.S. Payment § 1.

Webster’s Second New International Dictionary defines the verb “to pay” as “to discharge one’s obligation.” Under the note here involved, the debtor makes a payment and receives simply and only pro tanto satisfaction of his debt. The central attribute of a deposit is lacking. The questioned language of the note executed by plaintiff uses the concept of payment some seven or eight times. No language refers to a deposit of funds. No right of refund to the borrower is established or even mentioned. All that we have here from the language of this note is a binding direction imposed upon defendant as a creditor concerning payment of taxes and insurance. Liese v. Hentze, 326 Ill. 633, 639; Village of Winfield v. Reliance Insurance Co., 64 Ill.App.2d 253, 257-58; Industrial Development Corp. v. United States, 138 F.Supp. 63, 64 (N.D. Ill. 1955).

In this regard, we are impressed with the argument made by defendant that since the first option, which uses the term “trust”, provides specifically that the payment is to be, “without earnings”, it should follow that, if by construction or implication, the second option were to be deemed a trust, it should partake of the same attribute expressed with reference to option one and be carried without earnings. The learned and able trial judge who heard this case was also impressed by this argument. In a written memorandum sustaining the seventh ground raised by defendant in support of its motion to dismiss, the court held that, “The plaintiff has waived the right to earnings on any funds on deposit with the defendant in a trust capacity.”

The trial judge apparently reasoned that intent to create an express trust appears in the first option. The phrase “without earnings” shows clear intent by the makers of the note to waive avails or interest or earnings from the arrangement. We necessarily reject plaintiff’s rather contrived argument that it was intended only to relieve defendant of its duty as a trustee to invest the monthly payments as received. The remaining two options descend in order of reduced benefit to the borrower and ascend in increased privilege to the lender. It foUows a fortiori that, if a trust be established by construction or implication from the language of the second option, the waiver of earnings should be applied. Furthermore, if the second option be deemed to create a trust, it becomes identical in operation with the first option. Hence, all of the language of option two would become superfluous and without meaning. This would effectively deprive defendant of the option it specifically elected when it chose the second alternative. The conclusion results that by choice of the second option defendant exercised its privilege of negating the existence of a trust relationship.

We must expressly reject plaintiff’s argument that a trust is created because of use of the word “pledge” in the note. This pertains to the statement appearing in the note: “If such sums are held in trust or carried in a borrowers tax and insurance account, the same are hereby pledged together with any other account of the undersigned in the Association to further secure this indebtedness * * This contention is a complete oversimplification and is based upon the most elementary deductive reasoning. The syllogism is: Every pledge is a trust. This note contains a pledge. Therefore this note is a trust. However, the major premise is completely invalid. Every pledge is not a trust. Circumstances may arise in the course of any pledge situation in which some of the attributes of a trust appear; particularly with reference to management or reduction to possession of collateral. This is the type of situation which appears in the cases cited by plaintiff. (Wetherell v. Johnson, 208 Ill. 247; Union Trust Co. v. Rigdon, 93 Ill. 458 and Joliet Iron Co. v. Scioto Firebrick Co., 82 Ill. 548.) A pledgee who does not deal properly with property of the pledgor in his possession may be charged with fiduciary responsibility because he has become a constructive trustee or a trustee ex maleficio. However, this does not mean, and cannot mean, that every pledgee is a trustee of an express trust.

It is true, as plaintiff argues, “* * * that the general property or title to the property pledged remains in the pledgor * * ”, subject to the hen or rights of the pledgee until the debt has been paid. Painter v. Merchants & Manufacturers Bank of Milwaukee, 277 Ill.App. 208, 229. But, this merely points up and emphasizes the distinction of a pledge from the case at bar. Here, when monthly payments were made, the mortgagor divested himself of all rights to the amount paid and relied directly and solely upon the contractual obligation of defendant to pay insurance and taxes. It could be argued with greater force, and with considerably more logic, that the language, “If such sums are held in trust or carried in a borrower’s tax and insurance account * * accentuates the absence of trust attributes from the second option because it specifically states the trust or first option as one alternative and the borrower’s account as the second.

One further attribute of the transaction negatives with finality the possibility that the second option resulted in a trust relationship. As shown, these monthly payments were made by plaintiff and other borrowers virtually without recourse beyond their right to pro tanto payment of taxes and insurance. When the payments were made, the borrowers retained no specific property rights in any of the sums thus paid. They retained no right to refund of any portion of any payment. The payment was unconditional except for a contractual right vested in the borrower to have the taxes and insurance paid to the extent of the total of the monthly payments. Plaintiff had no property rights beyond this in any payment after it was made. The “borrower’s tax and insurance account” simply provided an easy method for ascertainment of the amount available for taxes and insurance at any given time. It is ancient and basic trust law that a res or specific property is essential for the existence of a trust. (Colegrove & Co. State Bank v. Gaupp, 357 Ill. 499, 504; Williams v. Rock River Savings & Loan Association, 51 Ill.App.2d 5, 13; Bogert, Trusts and Trustees, § 111 (2nded. 1964).) Since no property right was retained by plaintiff in payments after made, it must necessarily follow that no trust was created.

All of these matters point with definity to the essential lack of any attribute of a trust in the second option. Tlius, although we expressly approve of the statement of the trial judge regarding waiver, we will also base our affirmance of the judgment upon the broader base of interpretation and construction of the entire portion of the note stated above, as viewed in the light of the entire transaction between the parties.

The conclusions above reached are amply supported by additional excellent authority. Even assuming that the payments made by plaintiff can properly be designated as “deposits” as distinguished from “payments”, we believe that the result would follow that these funds would not be held in trust as a special deposit. A number of decisions are cited by both parties in connection with this specific facet of the problem. Plaintiff relies upon several cases of which People v. Farmers State Bank, 338 Ill. 134 and People v. West Side Trust & Savings Bank, 376 Ill. 339 are typical. Both of these decisions involve bank deposits. Both divide the general term “deposit” into special and general categories. It is pointed out in these cases that in a general deposit, the bank merely becomes the debtor of the depositor. Where there is a deposit, “* * * by special agreement or under circumstances sufficient to create a trust * * *” the relationship of trustee and beneficiary is created. (People v. Farmers State Bank, 338 Ill. 134, 137.) The same distinction was set forth in People v. West Side Trust & Savings Bank, 376 Ill. 339, 342 where the problem before the court was the allowance of a preferred claim against the assets of the closed bank. However, cases of this type are inapplicable here. In the case at bar, we are not dealing with a segregated deposit set up solely for a specific purpose. Also, the circumstances here are not only not “sufficient to create a trust,” (People v. Farmers State Bank,) 338 Ill. 134, 137, but the language used negates the possibility of creation of an express trust.

The opinion of the Court of Appeals for the Eighth Circuit, based upon the law of Missouri, serves to clarify this situation. (First National Bank of Clinton v. Julian (8thCir. 1967), 383 F.2d 329.) There, the debtor established a checking account in the bank as a security reserve. There was no agreement for isolation of this account or for the bank to hold it separate and apart from other funds. Monthly deposits were made by the debtor and he was not permitted to draw checks without approval of the bank. The court held that this type of account, although a general deposit for a special purpose, created simply a general deposit. The court pointed out that the distinguishing feature of the transaction was the absence of any agreement that the deposit be kept intact and in effect segregated for a specific purpose. (383 F.2d 329, 337.) The Court of Appeals cited and depended upon the Restatement of the Law of Trusts as well as a statement made in 10 Am.Jur.2d Banks § 363. The factor of absence of any agreement for separation, segregation or isolation of the funds is thus apparently a prime consideration in determining that the account in question constituted a general deposit as distinguished from a trust fund.

Another convincing authority is the decision by this court in Italo American National Union v. Mead Cycle Co., 12 Ill.App.2d 479, published only in abstract. A tenant gave the landlord a sum of money as collateral security for the faithful performance of all obligations of the lease but also as rent for the last five months of the term. This court held that this transaction did not establish a trust relationship but that it was in effect payment of an indebtedness due the lessor. The following language of the court is pertinent here:

“In no event was the deposit, or any part thereof, to be returned to the lessee. If the lessee did not breach the lease, the fund was to be held by the lessor as payment of rent for the last five months. The money, therefore, became the property of the lessor immediately upon its payment or deposit, to be used first for the payment of damages, if any, resulting from any breach of the lease by lessee, and then for the payment of the rent at the end of the term. There is no trust relation between the parties and the court cannot alter the terms of the contract between them.”

Perhaps the most persuasive authority cited in all of the voluminous briefs is First Federal Savings and Loan Association of Lincoln v. The Board of Equalization of Lancaster County, 182 Neb. 25, 152 N.W.2d 8. There, the Federal Savings and Loan Association challenged imposition of a tax upon intangible property. The property involved was advance monthly payments by borrowers to be used to pay taxes and insurance upon mortgaged property. The Supreme Court of Nebraska pointed out that if these payments became the property of the Savings and Loan Association they would be exempt from the intangible tax. On the contrary, if they remained the property of the borrowers, they would be subject to the tax. The court held that the relationship between the borrower and the Association was contractual and that the rights and liabilities of the various borrowers would be determined by the loan instruments. The heart of the short opinion can be found in the following paragraphs (152 N.W.2d 8 at 9):

“The testimony and the loan instruments which appear in the record show that the advance payment for taxes and insurance, where required, is as compulsory as the payment for interest and principal. The borrowers only right is to require that each payment be applied in accordance with the terms of the contract. The plaintiffs are not required to keep the advance payment funds separate, but are permitted to commingle and invest them and keep the earnings. Any surplus over and beyond the amount required to pay the taxes and insurance is used to reduce the principal of the loan. The borrower has no right to a refund while the principal indebtedness remains unpaid, but in some cases the association could make a refund at its option.
We think that the record shows that the advance payments for insurance and taxes, when made, become the property of the plaintiffs the same as any other payment required of the borrower. Other courts which have considered the question have reached a similar conclusion. See, In re Simon, D.C., 167 F. Supp. 214; Central Suffolk Hospital Assn. v. Downs, Sup., 213 N.Y.S.2d 192; Valerio v. College Point Savings Bank, 48 Misc.2d 91, 264 N.Y.S.2d 343.”

The court concluded that the advance payments for interest and taxes when made become the property of tire Loan Association precisely as any other payment required of the borrower. As above shown, the Supreme Court of Nebraska cited three cases in support of its conclusion. Plaintiff urges that these three cases fail to support the result reached. Upon examination, we conclude that these three decisions do support the position taken by the Supreme Court of Nebraska. The conclusion was reached that the mortgagor has no interest in funds thus paid and such funds are not susceptible to appropriation by other creditors. The three cases in chronological order are In the Matter of Noel Simon, Bankrupt (E.D.N.Y. 1958), 167 F.Supp. 214; Central Suffolk Hospital Association v. Downs (1961), 213 N.Y.S.2d 192 and Valerio v. College Point Savings Bank (1965), 264 N.Y.S.2d 343.

Another persuasive circumstance arises from the pertinent regulation of the Federal Home Loan Bank Board. The Board is the governing body of all Federal savings and loan associations and has statutory authority to issue regulations governing their transaction of business. (12 U.S.C.A. § 1464(a).) In a frequently cited statement, the United States District Court has described these rules as * * comprehensive rules and regulations concerning the powers and operations of every Federal Savings and Loan association from its cradle to its corporate grave.” (People v. Coast Federal Savings & Loan Association (S.D.Cal. 1951), 98 F.Supp. 311, 316.) The same opinion pointed out that these rules and regulations, “* * * have the force and effect of law, and are noticed judicially.” (98 F.Supp. 311, 316.) Regulations of the Board permit the defendant here to require its borrowers to make advance payments of taxes and insurance. The regulation provides (12 C.F.R. § 545.6-11):

“A Federal association may require that the equivalent of one-twelfth of the estimated annual taxes, assessments, insurance premiums, and other charges on real estate security, or any of them, be paid in advance to such association in addition to interest and principal payments on its loans, to enable the association to pay such charges as they become due from the funds so received.”

This specific regulation for advance payments by the borrower negates the idea that such payments are deposits which are to be held as a bust for the benefit of the debtor. The second opbon in the note, exercised by defendant, was merely a provision for advance payments for taxes and insurance as authorized by the regulation and was not intended to establish a trust fund. The conclusion necessarily follows that there was no bust relationship between these parbes. The order dismissing plaintiff’s amended complaint upon the seventh stated ground in the motion to dismiss was correct and proper in all respects.

The motion to dismiss filed by defendant raised a number of additional grounds. Defendants brief argued certain of these grounds extensively and cited many authorities. Defendant argues sbongly: (1) that pertinent regulations of the Federal Home Loan Board do not permit payment of earnings or interest on the payments in question; (2) the Federal Home Loan Bank Board has primary jurisdiction with respect to the subject matter of the amended complaint; (3) plaintiffs claim is barred by laches; and, (4) that plaintiff cannot maintain this suit as a class action. Plaintiff has responded to each of these arguments in a forceful and ample manner. On oral argument, we granted defendant leave to file instanter an additional brief and argument. With our permission, plaintiff has filed a lengthy response. In addition, with leave of court, plaintiff has filed a supplemental brief on the issue of primary jurisdiction. We granted permission to file this document despite lengthy objections filed by defendant. Also, we have taken with the case a motion to correct defendant’s brief which is actually equivalent to yet another brief and argument and a detailed reply by plaintiff to this motion.

In our opinion, defendant, as the successful appellee, may urge any point shown by the record for affirmance of the judgment even though these points were not raised or passed upon by the trial court. (Shaw v. Lorenz, 42 Ill.2d 246, 248. For an excellent exposition of this principle, see also Becker v. Billings, 304 Ill. 190, 205.) However, in view of the conclusions above reached, we find it unnecessary to pass upon any of these remaining contentions raised by defendant. Consequently, we expressly abstain from deciding defendants motion to correct its brief and we refrain from expressing any opinion with reference to the additional grounds raised in the motion to dismiss.

The order dismissing plaintiffs amended complaint is affirmed.

Order affirmed.

BURKE, P. J., and LYONS, J., concur.


source: Caselaw Access Project

author: Mr. PRESIDING JUSTICE SMITH

license: Public Domain

text:
    Kraftco Corporation, Plaintiff-Counter-Defendant-Appellee, v. Raymond Koblus, d/b/a K & M Distributing Company, Defendant-Counter-Plaintiff-Appellant.
    (No. 11466;
    Fourth District
    October 8, 1971.

      Dunn, Dunn, Brady, Goebel, Ulbrich & Hayes, of Bloomington, (William M. Goebel, of counsel,) for appellant.
    Noble, Brown & Sheerin, of Chicago, and Thomson, Thomson & Mirza, of Bloomington, (Narcisse A. Brown and James G. Walker, of counsel,) for appellee.
   Mr. PRESIDING JUSTICE SMITH

delivered the opinion of the court:

This is an appeal from an order of the trial court entering judgment on the complaint and dismissing a counterclaim filed by a distributor, Raymond Kolbus, against Kraftco, a manufacturer. The complaint was filed alleging that Kolbus, the distributor, failed to pay Kraftco, the manufacturer, for certain items purchased from it. The answer admitted failure to pay for items purchased, but alleged a setoff. A counterclaim was filed with the answer asserting that there was a setoff by reason of a breach of contract, and amended twice. The trial corut on motion entered judgment for the Plaintiff on the complaint and on motion dismissed tire second amended counterclaim for failure to state a cause of action.

The second amended counterclaim alleges the following facts. Kraftco is the owner and manufacturer of Sealtest products through its wholly owned subsidiary, Sealtest Foods. Sealtest is alleged to be the agent of Kraftco. Kolbus is a distributor of Sealtest products. In 1959, Kolbus, prior to the purchase of the distributorship from a third party, conferred with employees and agents of Sealtest pertaining to the purchase of this distributorship. In these conferences, employees of Sealtest represented that Kolbus would continue as the distributor of Sealtest, that Sealtest would see to it that the territory was exclusive, that Sealtest would assist Kolbus in case of a desire to sell the distributorship, that Sealtest would stand behind the purchasers so that they would have something to sell and that Sealtest saw to it that their distributors were kept satisfied. Kolbus agreed at this time with Sealtest to distribute its products and to use his best efforts in so doing. Kolbus thereafter purchased the distributorship from this third party. A portion of the price was paid for the good will of the business. It is alleged that Kolbus thereafter over a period of ten years, invested approximately $43,000.00 in the business and sold over $2,000,000.00 worth of products for Sealtest. In April and May of 1969, Kolbus attempted to sell this distributorship to a third party. This third party conferred with Sealtest and was informed by Sealtest that it could not guarantee the purchaser the distributorship for the reason that the company was thinking of distributing its products itself. Kolbus then conferred with Sealtest and was informed similarly that the company could not assure the distributorship to the prospective purchaser. Approximately two months thereafter, in June of 1969, Kraftco, without any notice to Kolbus, terminated the distributorship. The refusal to continue to furnish dairy products to Kolbus was alleged as breach of and a violation of the agreement between Kraftco and Kolbus. The breach was alleged to have been done intentionally and maliciously and punitive and compensatory damages are sought.

The posture of the parties on this appeal is directed against the order of the trial court which struck the counterclaim. The briefs of the parties raised three issues — mutuality of obligation, Statute of Frauds and punitive damages. The trial court in dismissing the counterclaim, did not state the reasons for its dismissal. For the purpose of this appeal, those facts well pleaded in the counterclaim will be taken as true; however, conclusions of law or fact unsupported by allegations of fact are not admitted. Gordon E. Adams v. J. I. Case Co., 125 Ill.App.2d 388, 261 N.E.2d 1.

It is basic in the formation of a contract that the parties must have entered into an agreement which is sufficiently definite and certain so that the terms are either determined or may be implied. It is stated in Lee Shell Co., Inc. v. Model Food Center, Inc., 111 Ill.App.2d 235, 250 N.E.2d 666, on p. 244:

“It is basic contract law that the terms of the contract must be reasonably certain; and when the material terms and conditions are not ascertainable, no enforceable contract is created.”

Kolbus, in this case, alleged as a contract statements which were made to him in very general terms. At the time of the purchase of the distributorship from a third party, he had a conversation with agents of the manufacturer. The statements made were that the distributorship could be purchased, that Sealtest stood behind its distributors and that Sealtest would aid in case of a subsequent sale of the distributorship. These representations alleged do not appear to have the strength of a contractual commitment and appear as general statements made by a third party on inquiring as to what would be done if the purchase was consummated. Kolbus did purchase the distributorship and did for ten years act as a distributor. These representations appear informal and do not set forth terms of any purported agreement. Such questions as duration, prices, area, products, quotas, etc. are not alleged. This Court areas with the statements contained in Heuvelman v. Triplett Electrical Instrument Co., 23 Ill.App.2d 231, 161 N.E.2d 875 on page 236:

“Such contracts extending for a long duration and resting entirely on parol should have for their basis definite and certain mutual promises. The words and the manner of their utterance should not be of that informal character which expresses only long continuing good will and hopes for eternal association.”

It is not up to the court to write an agreement for the parties. Although terms of the contract may be implied in certain circumstances, writing the total contract for the parties is without the purview of the courts. It would appear to this court certainty is lacking in this purported agreement of 1959 and the essential terms are unsettled. The allegations merely set forth utterances of an informal character and to attach to them the binding effect of a contractual commitment would be improper.

Both parties have devoted much of their argument to the question of mutuality. The purported agreement was alleged to be allowing Kolbus to purchase a distributorship and in assisting Kolbus in any future sale of the distributorship that he might want to make. Kolbus in turn agreed to use his best efforts to sell the products. Mutuality of obligation is necessary for the contract to be enforceable. Schoen v. Caterpillar Tractor Co., 103 Ill.App.2d 197, 243 N.E.2d 31. Mutuality of obligation is defined as follows:

“Mutuality of obligation means that both parties to an agreement are bound or neither is bound. A contract in its nature and character and according to the intention of the parties should involve and impose a reciprocity of obligation and duty.” Illinois Law & Practice, Contracts, Section 7.

In Goodman v. Motor Products Corporation, 9 Ill.App.2d 57, 132 N.E.2d 356, the court held that a distributorship contract giving the Plaintiff the exclusive right to sell products of the Defendant outside the United States as long as he devoted his full time and attention thereto and devoted his best efforts to sell the product was lacking in mutuality. The contract in that case was terminated after notice and a suit was brought for its alleged wrongful termination. The court holding that the contract lacked mutuality stated on page 68 as follows:

“Assuming that the oral agreement which Goodman alleged, and to which he testified, was made, it is one which was to run without a prescribed limit and which could be terminated only by Goodman in his uncontrolled discretion and was binding on defendant until Goodman of his own volition ceased to devote his time and efforts to selling and distributing Deepfreeze products. . . . Under the doctrine of mutuality, such a contract, insofar as it was executory, could be terminated by defendant by due notice at any time as to all or any part of Goodmans assigned territory.”

In speaking of the phrase ‘best efforts” that court commented on pages 71-72 that the term is too vague to be fairly intelligible and too lacking in certainty to be enforceable.

Similarly in Joliet Bottling Co. v. Joliet Citizens’ Brewing Co., 254 Ill. 215, 98 N.E. 263, the brewing company agreed to furnish the bottler with beer for an indefinite period of time in an amount sufficient to supply the latter’s demand. Expenditures were made in reliance upon the agreement which was in writing. The cotut found that this agreement was lacking in mutuality and stated on pages 218-219:

“The only thing the contract bound appellant to do was to pay the price agreed upon and bottle the beer of appellee and to market the same as the product of appellee so long as it furnished beer satisfactory in quality and in such quantities as the trade demanded. No mention is made of any period of time the agreement should continue in force. ... It cannot be doubted, we think that the contract was unilateral and void for want of mutuality . . . Furthermore, no time being fixed during which the agreement should continue in force, it was terminable at the will of either party.”

In this case, there was no obligation upon Kolbus other than to use his best efforts. He had no obligation to sell any specific quantity and no obligation to meet any quotas. The operation of this contract was totally dependent upon the actions of Kolbus. The mere allegation of best efforts is too indefinite and uncertain to be an enforceable standard. As such, the contract was lacking in mutuality of obligation and unenforceable.

Even assuming the terms were definite and that there is the requisite mutuality for the enforcement of this agreement, the agreement, being for an indefinite duration, is terminable at the will of either party. It has long been the holding of the Illinois courts that where an executory contract fixes no time for its operation, it is terminable at the will of either party. (Schoen v. Caterpillar Tractor Co., 103 Ill.App.2d 197, 243 N.E.2d 31; Joliet Bottling Co. v. Brewing Co., 254 Ill. 215, 98 N.E. 263; Meadows v. Radio Industries, 222 Fed. 347; Gage v. Village of Wilmette, 315 Ill. 328, 146 N.E. 325.) The agreement here was executory in nature. No fixed time or duration is alleged. As such, insofar as its executory portions are concerned, it is terminable at the wiH of either party.

The aHegations in the counterclaim allege that the termination was without notice. This poses a somewhat difficult question, as the contract had been in existence for ten years. An argument could be made that reasonable notice should be required under such circumstances. However, with the exception of the Goodman and Meadows cases cited herein, notice was not given in the above cases. These courts have held that these contracts for indefinite duration may be terminated at wiH. Under these holdings, notice would not appear necessary.

For the foregoing reasons we hold that the aHegations of the counterclaim herein do not set forth the terms of a mutuality enforceable and binding contract and we therefore affirm the trial court’s dismissal of the counterclaim. It is therefore not necessary to reach the question raised by the parties as to the application of the Statute of Frauds to this purported agreement and the issue of punitive damages.

Judgment affirmed.

CRAVEN and TRAPP, JJ., concur.


author: Mr. PRESIDING JUSTICE SMITH.

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. George Gupton Swinney, Defendant-Appellant.
    (No. 11482;
    Fourth District
    October 8, 1971.
    John F. McNichoIs, of Defender Project, of Springfield, (J. Daniel Stewart, Staff Attorney, of counsel,) for appellant.
   Opinion by

Mr. PRESIDING JUSTICE SMITH.


author: Mr. JUSTICE LYONS

text:
    Candido Rivera, Plaintiff-Appellee, v. Rockford Machine & Tool Company, Defendant-Appellant.
    (No. 54002;
    First District
    September 27, 1971.

      Gerard E. Grashom, of Chicago, (Edward J. Wendrow, of Winston, Strawn, Smith & Patterson, of counsel,) for appellant.
    Frank J. Mackey, Jr., of Chicago, (Sidney Z. Karasik, of counsel,) for appeUee.
   Mr. JUSTICE LYONS

delivered the opinion of the court:

This is an action for damages for personal injuries brought against the manufacturer of a plastic injection molding machine, known as the Rockford Hijector, by a machine operator who suffered the loss of his right hand. The cause was submitted to a jury under the theory of strict liability and resulted in a verdict for plaintiff in the amount of $155,000 upon which judgment was entered.

On appeal the defendant contends:

1) That the verdict on the issue of liability is erroneous as a matter of law;
2) That the trial court erred in admitting plaintiff’s evidence that certain safety devices were available at the time the machine involved was manufactured and sold which would have prevented the occurrence;
3) That the court erred in allowing plaintiff’s counsel to use certain published material in cross-examining a defense witness;
4) That the court erred in denying defendant’s motion to strike the testimony of one of plaintiff’s expert witnesses;
5) That the jury was not properly instructed; and
6) That the verdict is excessive and therefore any affirmance must be conditioned upon a remittitur.

The statement of facts will be restricted to only that which we deem necessary for purposes of the appeal. The machine on which plaintiff was injured, a Rockford Hijector, is a plastic injection molding machine manufactured and sold by the defendant. In function it is essentially a horizontally operating hydraulic press, the right side of which is stationary. One half of a die or mold is secured to each side of the press and heated to approximately three hundred degrees Fahrenheit.

As the machine was used on the date of plaintiff’s injury, plastic material, which had been heated until a desired degree of softness had been achieved, was manually placed in the cavities of the right side of the mold by the machine operator. The machine cycle is then begun by the closing of a safety gate which is mounted on rollers and which, when in a closed position, physically bars the operator from the mold area. When the gate is placed in the closed position certain electronic limit switches are activated and the machine’s cycle is begun. Until these switches have been activated by the gate, the machine is said to be electrically “dead.”

The cycle of the machine consists of the movement by hydraulic means of the left half of the die to meet the right half. The two halves of the die are then pressed together under a force of several tons, thus forcing the plastic material to assume the contours of the mold. The machine remains in this position for a short period, allowing the newly formed product to become heat cured. Thereafter, the left or movable half of the die is automatically retracted and knock out pins in the mold loosen the product in order to facilitate its manual removal by the machine operator, after the safety gate has been opened.

The machine is so designed that the safety gate cannot be opened once the machine’s cycle has begun. Once closed, the gate can be returned to the open position, allowing access to the mold area, only after the cycle has been completed and the press returned to the open position.

The hydraulic system which provides the force for movement of the left half of the die and molding pressure consists of a single cylinder and piston. At the end of the piston rod opposite the piston is a platen to which is secured the left half of the mold. The piston, and thus the left half of the mold by reason of its connection thereto through the platen and piston rod, is moved by the transfer of hydraulic fluid under pressure from one side to the other of the piston within the cylinder. Under this arrangement some pressure is maintained on both sides of the piston at all times.

On the morning of his injury, plaintiff, an experienced operator, had run about six “shots” (cycles of the machine) and was in the process of removing the product from the machine when the mold unexpectedly closed on his right hand. The hand was burned to the extent that it had become proteinurized (described by the doctor as “the temperature had coagulated the protein much like when you boil an egg, the yolk becomes hard and white. * * * instead of being hard and white, was hard and black.”) requiring amputation. Subsequent examination of the machine revealed that the piston rod had fractured at a point inside the cylinder. The connection between the piston and the platen having been thus severed, pressure within the cylinder caused the platen and mold to return to the closed position.

The rod which broke on the date of plaintiff’s injury was not an original component of the machine, but was manufactured and installed on some prior date by plaintiff’s employer.

The first premise upon which defendant bases its contention that the jury’s verdict is erroneous as a matter of law is the contention that the evidence established the proximate cause of plaintiff’s injury to be the failure of the piston rod, a component of the machine with which defendant had no contact since it was a replacement item manufactured and installed by plaintiff’s employer following an earlier failure of the original rod. It is further contended in this regard that the only evidence with respect to the cause of the replacement rod’s failure points to faulty maintenance on the part of plaintiff’s employer. The maintenance referred to is that of the piston guide shoes which, if allowed to wear, could cause extraordinary stress to be exerted upon the rod. Thus, defendant argues that the evidence established negligence on the part of plaintiff’s employer as the sole proximate cause of his injuries. Such a defense was held to be available to a defendant in a strict liability case in Santiago v. Package Machinery Company (1970), 123 Ill.App.2d 305, 260 N.E.2d 89.

We believe that plaintiff’s theory of the case, that the machine was defective in design and that the defect was the sole or at least a contributing cause of his injuries was sufficiently supported by the evidence to warrant submission of the question of causation to the jury. In this connection we note that defendant’s assertion that the only evidence received as to the cause of the piston rod’s failure points to negligence on the part of plaintiff’s employer is seriously misleading. There was evidence to the effect that the guide shoes on the machine had not been replaced for some period of time and that if they were allowed to become worn their deteriorated condition could cause extraordinary stress to be placed on the piston rod. However, there was no evidence which tended to establish that the guide shoes were in fact in a deteriorated condition. Moreover, while plaintiff did not offer evidence to establish the actual cause of the rod’s failure, his expert witness Blah testified that if the guide shoes were in fact in a deteriorated condition and unusual stress on the piston rod resulted, the rod would not have broken where it did, inside the cylinder, but rather at the toggle joints which were located outside the cylinder. This judgment was based upon the location of the guide shoes and the structure of tire rod. In addition this witness testified that the fact that this was not the first instance of rod failure indicated to him that the cause was due to some defect in design.

Defendant has also asserted that the judgment must be reversed as a matter of law since the evidence does not establish a violation of a duty which it owed to the plaintiff. In support of this proposition it is argued that a manufacturer is exposed to no greater liability under strict liability theory as announced in Suvada v. White Motor Company (1965), 32 Ill.2d 612, 210 N.E.2d 182 than under common law negligence theory. Therefore, it is argued, defendant cannot be held liable under plaintiff’s evidence, which is characterized as merely evidence that it was possible to have manufactured a safer machine. Similarly, it is also argued that the question of whether defendant was under a duty to incorporate into the design of its machine either or both of the safety devices (hydraulic interlock and interference bar) the absence of which, under plaintiff’s theory of the case rendered the Hijector unreasonably dangerous, was a question of law for the court which should have been answered in the negative.

While we might agree that a manufacturer’s actual liability exposure was not expanded by Suvada and that under the doctrine of strict liability in tort as announced therein under the doctrine of strict liability in tort as announced therein plaintiff cannot recover merely on evidence that it was possible to have manufactured a safer product, our concurrence would be of no aid to the defendant. While it is true that the question of whether a duty exists is a question of law for the court, the only duty with which the court is concerned in a strict liability case is the defendant’s duty to place into the stream of commerce only those articles which are not unreasonably dangerous when used for their intended purpose. This was the sole duty imposed. Resolution of the question of whether defendant’s machine was unreasonably dangerous for failure to incorporate certain safety devices which plaintiffs evidence shows were available at the time the Hijector left defendant’s control was the function of the jury as trier of fact. Their finding as to this question, when considered in connection with defendant’s duty, determines the issue of liability. Evans v. General Motors Corporation (1966), 359 F.2d 822, relied upon by defendant, illustrates the principle. There the court of appeals properly upheld the trial court’s determination that plaintiff’s complaint failed to state a cause of action under strict liability theory since the manufacturer’s duty as outlined in Suvada was not truly involved. In that case plaintiff contended that defendant was hable for injuries which she sustained by reason of an occurrence which could not be construed as a consequence of the normal intended use of defendant’s product, i.e., a collision with another automobile. There exists no similarity between Evans and the present case with respect to the duty alleged to be breached.

While we agree with defendant that a plaintiff cannot recover under strict liability theory merely on evidence that it was possible to have manufactured a safer product, we cannot accept the further contention that it is improper to admit evidence concerning the availability, at the time the product in question left defendant’s control, of methods or devices not adopted. In the negligence cases relied upon by defendant the question to be resolved by the trier of fact was whether a particular act or procedure was reasonable. Thus, evidence of alternative methods were not relevant. Such is not the case, however, under strict liability theory where the question of whether particular acts were negligent does not arise.

Neither do we believe that evidence of this nature need be restricted to proof of the custom or general usage in the industry. The public policy considerations which provided the foundation upon which the Suvada decision was based require that the trier of fact be aUowed to consider methods and devices which were available, although not generally adopted, in determining whether the danger to which plaintiff was exposed by reason of his use of the defendant’s product was unreasonable. (See Moren v. Samuel M. Langston Company (1968), 96 Ill.App.2d 133, 237 N.E.2d 759.) If such were not the case, manufacturers would be free to ignore the risks attendant to the use of their products secure in the knowledge that their own failure to adopt new developments, techniques or devices to practical use wiU shield them from liability. We find the statement of Mr. Justice Learned Hand, made in another connection, to be appropriate in this regard:

“There are, no doubt, cases where the courts seem to make the general practice of the calling the standard of proper düigence * * Indeed in most cases reasonable prudence is in fact common prudence; but strictly it is never its measure; a whole caUing may have unduly lagged in the adoption of new and available devices. The T. J. Hooper, et al. v. H. N. Hartwell and Son (1932), 60 F.2d 737, 740.

Neither do we accept defendant’s contention that such evidence is improper since a manufacturer is not obliged to adopt every new safety device which may be developed. A manufacturer is required to adopt any and all devices the absence of which render his product unreasonably dangerous.

Defendant also contends that the trial court erred in allowing plaintiff’s counsel to cross-examine defense witness Alden as though he were offered as an expert by reading certain passages from a book on die casting and an article which appeared in the December, 1945, issue of “Industrial Plastics”, a trade journal identified by Alden himself as reputable. The authoritative character of the publications is not questioned here. On direct examination Alden testified extensively with respect to his background in the plastic molding field and knowledge of the safety devices used by other manufacturers of injection molding machines at the time the machine on which plaintiff was injured was manufactured and sold. He was a part owner of and in charge of production of the company which was the predecessor of plaintiff’s employer. He was not aware of any manufacturer’s use of either a hydraulic safety device or a mechanical interference bar which would prevent the mold from closing in the event of rod failure. He also testified that he was in fact the inventor of the machine known as the Rockford Hijector and had received a patent thereon.

In view of Alden’s testimony on direct examination concerning his background, familiarity with the safety devices used by other manufacturers of injection molding machines, and his having invented the machine involved in this case, we do not believe that the trial court abused its discretion in allowing the cross-examination complained of.

Defendant’s next two points deal with the examination and testimony of plaintiff’s expert witness, Salzenstein. He was the second of plaintiff's witnesses to testify that in 1951 when the machine on which plaintiff was injured left defendant’s control there were in existence certain devices which would prevent the die halves from closing in the event of rod failure. The first of these was in the nature of a physical barrier to movement of the left half of the die (a drop or interference bar) and the second a hydraulic valve which could be operated by means of either an electrical or air solenoid. The valve would serve to reduce the hydraulic pressure in the cylinder to zero.

During the course of his examination of Salzenstein, plaintiff’s counsel, over objection, was allowed to read a passage from an article in a trade journal which described a hydraulic safety interlock linked to the electrical system of a machine. The witness, again over objection, was allowed to interpret the language of the article. On cross-examination the witness stated that his testimony with regard to the linking of hydraulic and electrical systems was based entirely on the article which plaintiff’s counsel had read.

Defendant contends that given this “admission” by the witness it was error to deny his motion to strike Salzenstein’s entire testimony. We do not agree. The rationale behind defendant’s argument is that the “admission” by Salzenstein established his testimony as hearsay in its entirety. A fair reading of the record, however, indicates to us that what defendant has characterized as Salzenstein’s “admission” related solely to that portion of his testimony wherein he interpreted the language of the article which was read to him. Thus the question of whether it was error to deny defendant’s motion to strike the testimony as hearsay can be considered only with respect to that portion of it to which the “admission” applies.

Defendant’s argument is that the article itself was not admissible as independant proof of the facts stated therein by reason of operation of the hearsay rule. Thus, it was error to allow that material to come before the jury indirectly by allowing the witness to state his interpretation thereof. In Santiago, cited above, this court allowed a considerable relaxation of the hearsay rule in the presentation of evidence of custom in the industry. In view of our determination that under strict liability evidence beyond the scope of custom is admissible for similar purposes, the same reasoning with respect to relaxation of the hearsay rule also applies. In any event, that small portion of Salzenstein’s testimony, when considered in perspective with the entirety of plaintiff’s evidence is so insignificant that any error which may have occurred in allowing it to stand is clearly insufficient to require reversal.

Defendant also contends that the trial court’s refusal to give certain instructions constitutes reversible error since without them the jury was left uninstructed on both the scope of a manufacturer’s duty under strict liability theory and defendant’s theory of the case with respect to the proximate cause of plaintiff’s injury. We find the first portion of this argument to be semantic only. While it is true that the instructions given to the jmy did not include the term “duty,” the jury was fully advised of the scope of a manufacturer’s liability exposure under strict liability theory. Neither do we find merit in the contention that the jmy was not instructed on defendant’s theory of proximate cause. The instruction on proximate cause which was given, taken together with the instruction on the elements which plaintiff must prove in order to recover, was clearly sufficient to place defendant’s theory before the jmy.

Finally, defendant contends that the verdict is excessive and that therefore any affirmance should be conditioned upon a substantial remittitur. The assessment of damages is a function of the jury and therefore reviewing courts will not lightly disturb their findings. Thus it has been held that a court of review should not disturb the jmy’s assessment of damages in a personal injury suit unless it appears that the jmy was improperly instructed on the issue of damages or that the verdict is the result of passion or prejudice. (See Olson v. Fleetwood (1970), 116 Ill.App.2d 411, 254 N.E.2d 271.) Defendant does not contend that the jmy was improperly instructed on damages. The substantial medical evidence contained in the record with respect to the extent of the amputation, decreased mobility of the remaining forearm, plantiff’s inability to adapt to the use of a prosthetic device, and post operative effects coupled with the evidence on loss of income precludes a finding that the verdict was the result of passion or prejudice.

Judgment affirmed.

BURKE, P. J., and GOLDBERG, J., concm.


text:
    The People of the State of Illinois, Appellee, v. Steven Joseph Robbins, Appellant.
    (No. 54938;
    First District
    September 27, 1971.

      Patrick A. Tuite, of Chicago, for appellant.
    Edward V. Hanrahan, State’s Attorney, of Chicago, (George Pappas, of counsel,) for the People.


author: Mr. JUSTICE SCHWARTZ

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Dennis M. Enright, Defendant-Appellant.
    (No. 54187;
    First District
    September 28, 1971.
    Bernard N. Brody, and William J. Nellis, of Chicago, for appellants.

      Edward V. Hanrahan, State’s Attorney, of Chicago, (Robert A. Novelle and Michael J. Goldstein, Assistant State’s Attorneys, of counsel,) for the People.
   Mr. JUSTICE SCHWARTZ

delivered the opinion of the court:

Defendant waived a jury, was tried by the court and found guilty of deceptive practices in violation of Section 17 — 1 of Chapter 38 of the Illinois Revised Statutes (1967). The pertinent part of that law provides as follows:

“A person commits a deceptive practice when, with intent to defraud:
# * #
(e) He obtains, or attempts to obtain property * * * by any of the following means:
(1) He uses a credit card which was issued to another, without the other’s consent.”

After a hearing in aggravation and mitigation the defendant was sentenced to serve 90 days in the House of Correction. On appeal he contends (1) that the State failed to establish guilt beyond a reasonable doubt, and (2) that the trial court erred in admitting in evidence a credit card allegedly used by the defendant without permission of the owner. The facts follow.

The first of four witnesses who testified on behalf of the State was Miss Zino, a saleswoman in the glove department of Marshall Field & Company’s store at 111 North State Street, Chicago. She testified that on December 24, 1968 she sold defendant pair of gloves. Defendant handed her a credit card and a sales slip was prepared on which defendant signed the name printed on the card. The State introduced Plaintiff’s Exhibit A for identification, which was a credit card identified by Miss Zino as the one presented to her by the defendant. She testified that she notified “Special services” of her credit sale to the defendant and that Charles Brown, a store detective, responded to her call.

Charles Brown testified that he was employed by Marshall Field & Company as a part-time store detective, that as he approached the glove counter in answer to the call, he saw defendant running down a main aisle in the store. Brown talked with Miss Zino and then pursued the defendant, whom he apprehended outside the store.

Robert R. Brinkman testified that the Marshall Field & Company credit card marked Plaintiff’s Exhibit A for identification was received by him in the mail after he had applied for a credit card. He stated that although his name was printed on the credit card, he had never used the card nor had he signed it. He testified that he had never seen defendant before nor had he ever given him permission to use the card. Plaintiffs Exhibit A for identification was admitted in evidence over the defendant’s objection that it had not been sufficiently identified.

Mrs. Nancy Brinkman testified that she was the wife of Robert R. Brinkman and that on December 2, 1967 she lost a Marshall Field & Company credit card bearing her husband’s name. The State then rested its case. Defendant chose to rest his case without calling any further witnesses and the court thereupon entered a finding of guilty. We proceed to a consideration of defendant’s first point.

He argues that the evidence presented by the State fails to establish two essential elements of the offense with which he is charged: (1) an intent to defraud, and (2) that he had ever used a credit card “issued” to another.

It is well established that intent is a state of mind which, if not admitted, can be shown by surrounding circumstances. (People v. Coolidge, 26 Ill.2d 533, 187 N.E.2d 694.) In the instant case the evidence reveals that defendant sought to purchase a pair of gloves by using a credit card bearing the name of Robert R. Brinkman, that he signed Brinkman’s name to the sales slip, that Brinkman had not consented to his use of the card and that he (defendant) ran from the scene while the sales clerk was awaiting the arrival of a store detective. These circumstances sufficiently establish defendant’s fradulent intent.

Defendant also contends that the evidence does not establish that the credit card here involved was ever “issued to another.” He argues that issuance can only be established through direct testimony that Marshall Field & Company actually distributed the card to Robert Brinkman and that “mere testimony of receipt” is insufficient. As before stated, Robert Brinkman testified that he received the credit card marked Plaintiffs Exhibit A after he had made an application therefor to Marshall Field & Company. The top portion of the card was green and written thereon in white script letters was the name, “Marshall Field & Company.” Also printed clearly on the face of the card was the name Robert R. Brinkman. Evidence that a credit card was received in the due course of mail delivery and in response to an application is probative of issuance to the addressee. (See L. W. Hubbell Fertilizer Co. v. Jacobellis, 195 Ill.App. 410; Wigmore, Evidence, VII, § 2153, p. 611 (3rd Ed. 1940); McCormick, Evidence, § 192, p. 404 (1954).) The trial court properly concluded that the credit card used by the defendant had been issued to Robert R. Brinkman by Marshall Field & Company.

Defendant’s contention that the credit card should have been excluded from evidence on the ground that it had not been sufficiently identified is without merit. Robert Brinkman testified that Plaintiff’s Exhibit A for identification, which was a Marshall Field & Company credit card bearing his name, was received by him in response to his application. That testimony, obviously believed by the trial court, established the fact that the credit card subsequently used by defendant belonged to Robert Brinkman. In a trial without a jury the credibility of a witness is for the court to decide and its determination of the issue will not be lightly set aside.

The judgment of the trial court is affirmed.

Judgment affirmed.

LEIGHTON, P. J., and STAMOS, J., concur.


author: Mr. JUSTICE STAMOS

text:
    The People of the State of Illinois, Plaintiff-Appellee, v. Ernest Faulkner, Defendant-Appellant.
    (No. 55657;
    First District
    September 28, 1971.
    Gerald W. Getty, Public Defender, of Chicago, for appellant.
    Edward V. Hanrahan, State’s Attorney, of Chicago, for the People.
   Mr. JUSTICE STAMOS

delivered the opinion of the court:

On August 9, 1968, defendant pleaded guilty to the crime of armed robbery and was placed on probation for three years. On August 25, 1970, he was convicted of the unlawful use of a weapon and again admitted to probation with the condition that he serve the first 120 days in the House of Correction.

A probation violation hearing was conducted on October 15, 1970 and his probation granted on August 9, 1968 was revoked and he was sentenced to not less than two nor more than six years in the Illinois State Penitentiary.

On October 15, 1970, defendant filed a notice of appeal and the Public Defender was appointed counsel. A motion to allow the Public Defender to withdraw from the case has been filed. He states that the only basis of appeal would be whether the probation violation was proven when it was stipulated at the probation violation hearing that defendant was convicted of the unlawful use of a weapon. In accordance with Anders v. California (1967), 386 U.S. 738 the Public Defender has submitted to this court a brief and the transcript of proceedings. The record shows that at the proceedings to revoke probation it was stipulated that defendant on August 25, 1970 had been convicted of the crime of unlawful use of a weapon.

Defendant did not file any pleadings in response to the notice of the Public Defender or of the court. Defendant did write this court and urged that his convictions for armed robbery and unlawful use of weapon were improper. However, no appeals were taken from these convictions. The record before us establishes that the probation was properly revoked and we sustain the position of the Public Defender. The motion for leave to withdraw is therefore allowed and the judgment is affirmed.

Judgment affirmed.

LEIGHTON, P. J., and SCHWARTZ, J., concur.


text:
    The People of the State of Illinois, Appellee, v. John H. Grant, Appellant.
    (No. 55794;
    First District
    September 28, 1971.

      Gerald W. Getty, Public Defender, of Chicago, for appellant.
    Edward V. Hanrahan, State’s Attorney, of Chicago, for the People.
   Mr. JUSTICE STAMOS

delivered the opinion of the court:

On November 17, 1970, defendant pleaded guilty to the charge of unlawful possession of narcotic drugs and was placed on probation for five years. On December 15, 1970, he leld a notice of appeal and the Public Defender was appointed as his counsel. A motion to allow the Public Defender to withdraw has been filed that states that the only basis of appeal would be whether the comt fully admonished the defendant as to the consequences and significance of his plea of guilty and whether it was error to accept the plea when during such plea defendant asserted his innocence.

Pursuant to Anders v. California (1967), 386 U.S. 738, the Public Defender has furnished this court with a brief in support of the petition to withdraw and a transcript of the proceedings and requests leave to withdraw.

The record reflects that defendant was fully admonished of the significance and consequences of his plea in full compliance with Ill. Rev. Stat, ch. 38, par. 115—3 and the then Supreme Court Rule 401(b) 1967.

A stipulation of facts was then read and revealed, inter alia, that defendant was observed in his room with a hypodermic needle and syringe and a search of the premises produced marijuana and codeine.

During the presentation of the foregoing stipulation the comt observed that defendant made gestures indicating that he disagreed with it. At this juncture the comt received assurances from the defendant that he was satisfied with his counsel’s representation. The comt then embarked upon a hearing in aggravation and mitigation. Defendant’s counsel advised the court that defendant was attending school, supporting his wife and two children by working part time for a plaster company. The prosecution recommended that defendant be placed on probation for five years and defendant’s counsel then made an application for probation. The court granted probation for five years and then addressed defendant and said:

“I do not accept pleas of guilty unless I believe that the defendant really wants to plead guilty. Do you still want to plead guilty? I ask you this for the last time.”

Defendant still persisted in his plea of guilty but the court stated that if defendant wished to say something the court wanted to hear it. Defendant then said:

“I have never been arrested. At the time they came * * * it was my roommate. He was at work that night. This is what I am saying * * * I hate to stand here. For the whole two years I’ve been going through hell with this same case, because I never been in jail. I don’t know what it is like to be in trouble. I want my freedom. You do things that you don’t want to do in order to maintain your freedom.”

When the court inquired whether defendant was guilty or not, defendant responded, “If I say I am not guilty this case will continue, and I will just continue' to have more burden.” The court then told defendant that if he is not guilty neither the court nor the prosecutor or defendant’s counsel could accept the plea of guilty. Defendant responded, “I don’t even have any witnesses so I will lose anyway.” The court expressed its firm belief that it did not want anybody to plead guilty who believes in his heart that he is not guilty and asked, “Mr. Grant, you have pleaded guilty. Do you persist in that plea?” Defendant responded and said that there was no keyhole in the door through which he could be seen and that he has worked too hard for them to come in and twist things around. The court again admonished the defendant as to the court’s desire that it would not accept a plea of guilty unless defendant was guilty unless defendant was guilty. Defendant again responded and said ‘Your Honor, if I answer that I still stand a chance that I might go to jail, and I don’t want to go.” The court responded:

“I asked you three times, and I will ask you again. I sit here in judgment of you. I am not concerned as to whether or not you can beat the case, but whether or not in your own mind you are guilty. I am not concerned as to whether or not you can beat the case or the State can prove the case, but whether or not in your own mind you are guilty of this charge. I think that is the dilemma facing you.
All right, Mr. Grant, I have already accepted your plea of guilty, and I enter a judgment on that finding, and I sentence you to five years probation on that plea of guilty. Does that help you?”

Defendant responded “Yes, sir”, and the court then said:

‘You know I want to make certain that these people know what they are doing. I don’t want them to plead guilty if they don’t feel that they are guilty, but sometimes people regard the evidence that is something they can’t beat or maybe they feel that somebody has been unfair to them. When I accept a plea of guilty I want the defendant to know in his own mind — I want him to say, ‘I am guilty, and please give me the best the court could.’ And in this case it was probation. I gave him five years probation, and that is my feeling. You understand me?”
Defendant said: “Yes, your Honor. Thank you.”

In North Carolina v. Alford, 400 U.S.25, 91 S.Ct.160, 27 L.Ed.2d 162, the court there sustained a plea of guilty which was entered under similar circumstances to the case at bar.

In Alford, the plea was accepted and witnesses testified. The defendant Alford then took the stand and testified that he had not committed the murder, but was pleading guilty to avoid the death penalty, but in light of his denial, however, he still desired to plead guilty to second degree murder.

In Alford, the court then said at page 37:

“Thus, while most pleas of guilty consist of both a waiver of trial and an express admission of guilt, the latter element is not a constitutional requisite to the imposition of criminal penalty. An individual accused of crime may voluntarily, knowingly, and understandingly consent to the imposition of a prison sentence even if he is unwilling or unable to admit his participation in the acts constituting the crime.”

The court in Alford also said at page 31:

“The standard was and remains whether the plea represents a voluntary and intelligent choice among the alternative courses of action open to the defendant. See Boykin v. Alabama, 395 U.S. 238, 242 [23 L.Ed.2d 274, 279; 89 S.Ct. 1709] (1969); Machibroda v. U.S., 368 U.S. 487, 493 [7 L.Ed.2d 473, 477 83 S.Ct. 510] (1962); Kercheval v. U.S., 274 U.S. 220, 223, [71 L.Ed.2d 1009, 1012, 47 S.Ct. 582] (1927). That he would not have pleaded except for the opportunity to limit the possible penalty does not necessarily demonstrate that the plea of guilty was not the product of a free and rational choice, especially where the defendant was represented by competent counsel whose advice was that the plea would be to the defendant’s advantage.”

We have made a complete examination of the record and have concluded that the public defender is correct and there is no merit to this appeal. Defendant received a copy of the Public Defender’s motion and brief; he was also sent a letter by this court advising him of the motion and that he could file any points he might choose to support his appeal. No response has been received from him.

The motion to withdraw as counsel for defendant is granted and the judgment is affirmed.

Judgment affirmed.

LEIGHTON, P. J„ and SCHWARTZ, J., concur.


author: Mr. JUSTICE DRUCKER

text:
    The People, ex rel. John I. Blanks, Plaintiff-Appellee, v. C. William Ruddell, Superintendent of the House of Correction of the City of Chicago, et al., Defendants-Appellants.
    (No. 54803;
    First District
    September 24, 1971.
    Richard L. Curry, Corporation Counsel of the City of Chicago, (Marvin E. Aspen and Gayle F. Haglund, Assistant Corporation Counsel, of Counsel,) for appellants.
    Richard F. McPartlin, of Chicago, for the People.
   Mr. JUSTICE DRUCKER

delivered the opinion of the court:

Plaintiff filed a complaint praying that a writ of mandamus issue to compel defendants to take all steps necessary to expunge his six-day suspension from the records of the House of Correction of the City of Chicago and from the records of the Civil Service Commission and to order defendants to pay his lost salary for the six-day suspension. The trial court ordered that a writ of mandamus issue commanding defendants to comply with the relief prayed for in the complaint.

On appeal the issue is whether an employee has a right to seek relief in the courts to invalidate an alleged illegal six-day suspension where the Civil Service Commission in the first instance is without jurisdiction to hold a hearing regarding the suspension.

Plaintiffs complaint for mandamus alleges that he was appointed a guard at the House of Correction on January 30, 1958, promoted to acting sergeant in January 1964 and promoted to the rank of captain in June 1964; that during his service he compiled an exemplary record for attendance, punctuality and efficiency; that he received two commendations for outstanding performance in duty; and that he had never been suspended, except for the six-day suspension involved herein.

The complaint also alleges that in April 1968 after a meeting between the Superintendent of the House of Correction and approximately 100 officers, including plaintiff, plaintiff was accused by the Superintendent of “inciting to insurrection” and was orally suspended for 29 days, which attempted suspension was revoked with no loss of work or pay being suffered by plaintiff; that on December 13, 1968, certain inmates at the House of Correction staged a “sit-down” and plaintiff participated with other supervisory personnel in keeping the “sit-down” quiet; that thereafter the Superintendent indicated to plaintiff that plaintiff or someone at his direction had called the newspapers regarding the “sit-down”; that at this time plaintiff informed the Superintendent that he did not call the newspapers nor did he direct anybody to call the media; that on December 14 plaintiff was suspended by the Superintendent for six days for “conduct unbecoming a Staff Officer”; that the Superintendent mailed written notice of the suspension to plaintiff on December 14; and that plaintiff returned to work on December 20, 1968.

The complaint further alleges that at the time of his suspension plaintiff requested a specific reason for his suspension and was told by the Superintendent that he was walking around influencing officers, and that he was carrying a Budget Book across the yard; that plaintiff denied the charges; that he was guilty of no cause warranting his suspension for six days or for any other period of time; that the imposition of the suspension was arbitrary, capricious and unreasonable; that he requested a hearing before the Civil Service Commission on March 24, 1969, which request was ignored and no hearing was granted; and that as a result of the illegal and arbitrary suspension he suffered loss of salary in the amount of $150.58 and had his employment record tainted.

Defendants’ motion to strike and dismiss the complaint was denied. Thereafter, defendants again renewed this motion urging that by reason of Ill. Rev. Stat. 1967, ch. 24, par. 10 — 1—18, plaintiff was not entitled to relief since his suspension was only for six days. Paragraph 10 — 1—18 provides in part:

“Nothing in this Division 1 limits the power of any officer to suspend a subordinate for a reasonable period, not exceeding 30 days except that any employee or officer suspended for more than 7 days or suspended within 6 months after a previous suspension shall be entitled, upon request, to a hearing before the civil service commission concerning the propriety of such suspension.”

The trial court again denied defendants’ motion to dismiss and when defendants stood on their motion, the mandamus writ was ordered.

The trial court upheld plaintiff’s contention that, since section 19 of Article II of the State constitution provides that every person shaU find a ready remedy in the law for injuries and wrongs received, it had the power to compel the expunging of plaintiff’s illegal six-day suspension and the payment of lost salary. Plaintiff relies upon People v. Illinois Toll Highway Commission, 3 Ill.2d 218. In that case the constitutionality of the State Toll Highway Commission Act, Ill. Rev. Stat. 1953, ch. 121, was attacked. One of the grounds urged was that section 28 making discretionary determinations of the Commission final was unconstitutional, citing section 19 of article II of the State constitution. The court held section 28 constitutional but also stated at page 233: “Recourse to the courts is not denied where bad faith, fraud, corruption, manifest oppression or a clear abuse of discretion enters into the commission’s determinations; the presence of any of these conditions will give ready access to the courts.”

We do not believe this principle is applicable in the instant case where a statute specifies the remedies and makes no provision for review of suspensions under seven days but grants a civil service hearing for longer suspensions.

In Heckendorn v. First Nat. Bank, 19 Ill.2d 190, the court in referring to Section 19 of Article II of the constitution stated at page 194: “Section 19 enunciates a basic policy of jurisprudence that serves both to preserve the rights recognized by the common law and to permit the fashioning of new remedies to meet changing conditions. However, this policy expression does not authorize us to create a cause of action unknown to the common law in the face of an express statutory prohibition.”

We cannot create a cause of action for fuU judicial review of suspensions under seven days when suspensions for more than seven days only entitle the aUeged injured party to a hearing before the Civil Service Commission concerning the propriety of his suspension. Internal discipline is necessary for the efficient and effective administration of government, and this is particularly true of a paramilitary organization such as the guards at the city jail, the police department, etc. The courts cannot properly intrude themselves through judicial proceedings into the discretionary imposition of disciplinary penalties for the minor infractions, classified as such by the statute. Continued abuses of discretion for suspension under seven days by those in charge may be ended by the supervisors or superintendent’s removal from office.

Plaintiffs’ argument infers that he was deprived of his right to due process and equal protection of the laws. In Miller v. City of Tulsa, Okl., 353 P.2d 705, plaintiff, a city police officer, argued that his five-day suspension without pay was improper and without authority. Defendants claimed that the authority granted to department heads to suspend employees for a short period of time for minor infractions is necessary for the efficient functioning of the various city departments, for without such authority comts would be called upon to determine the propriety of disciplinary action for every minor infraction. As the court therein found at page 707:

“In C.J.S. Municipal Corporations § 582 b., it is said:
‘The proceedings for the suspension of a policeman usually are regulated by constitutional, statutory, or charter provisions, and the prescribed mode must be followed. * #
A policeman may be suspended without a hearing where such procedure is authorized by statute, as in the case of suspensions for short periods of time for minor infractions. * * *.
An order suspending a policeman made without a hearing is made in the exercise of administrative power and is not a judgment.’

In State ex rel. Curtis et al. v. Steinkellner et al., 247 Wis. 1, 18 N.W.2d 355, 357, several firemen were suspended for a period of 15 days without a hearing, under statutory provisions of the City of Milwaukee authorizing such suspensions not exceeding thirty days. The court said:

* * [w]e conclude that it was within the power of the chief of the fire department to suspend for a period of less than thirty days without giving a trial satisfying the requirements of due process.
* * *. The power of the chief to apply summarily temporary and minor disciplinary measures in case of minor offenses is obviously necessary to the discipline of the department and does not affect a property right of the member so disciplined * * *.’
In Gray v. City of McKeesport, 113 Pa. Super. 24, 1 A.2d 834, the Superior Court of the State of Pennsylvania approved a statutory provision authorizing suspension of a police officer for a period of not more than 10 days without hearing and without charges being filed.
We are persuaded to the reasonableness and necessity of administrative rules authorizing suspensions for short periods without notice or hearing, for minor infractions of rules and regulations, and decline to hold that the suspension of plaintiff in the instant case violated plaintiff’s constitutional rights.”

See also State ex rel. City of Huntington v. Lombardo, 143 S.E.2d 535 (W.Va.).

In Clark v. Morris, 99 Ill.App.2d 24, plaintiff, a member of the Illinois State Highway Police, was suspended for thirty days without pay by the superintendent. Plaintiff argued that Ill. Rev. Stat. 1967, ch. 121, par. 307.13, and Rule 9 of the Merit Board which authorized such suspensions, violated the Illinois and Federal constitutional requirements of due process since they provided for no notice of charges or a hearing. The court held that the trial court properly dismissed plaintiff’s complaint.

As the court stated at pages 27-29:

“Due process is compounded of history, reason and the past course of decisions, and is neither an inflexible procedure, nor a technical concept with a fixed content unrelated to time, place and circumstances. The procedures required to provide due process follow determination of the governmental function, as well as the private interest that is affected. Cafeteria Workers v. McElroy, 367 US 886, 6 LEd2d 1230, 81 S Ct. 1743.
In the historical development of the policy of recognizing merit in public employment in this State, the Legislature has consistently authorized suspension without pay for limited periods as an appropriate disciplinary measure, and it has consistently determined that suspension for a period of thirty days, without written charges and hearing, is reasonable.
# # #
It is apparent that the Legislature intended, through § 307.14, to provide for notice and hearing prior to discharge, demotion, or suspension for more than thirty days, but recognized in § 307.13 that there are occasions for discipline by administrative suspension for thirty days or less. Such legislative determination has continued for many years and we cannot say that it is not a rational basis for internal administration.”

In the instant case we find that the suspension imposed upon plaintiff did not violate his constitutional rights.

The judgment of the trial court ordering that a writ of mandamus issue directing defendants to expunge from the records plaintiff’s suspension and paying plaintiff the salary lost by reason of said suspension is reversed.

Judgment reversed.

ENGLISH, P. J., and LORENZ, J., concur.


author: Mr. PRESIDING JUSTICE THOMAS J. MORAN

text:
    Country Mutual Insurance Company, Plaintiff-Appellant, v. Albert Elman Watson, el al., Defendants-Appellees.
    (No. 70-277;
    Second District
    October 8, 1971.

      Bert P. Snow, and John F. Graff, of Freeport, for appeUant.
    John A. Leemon, of Mt. CarroU, for appeUee.
   Mr. PRESIDING JUSTICE THOMAS J. MORAN

delivered the opinion of the court:

Plaintiff, Country Mutual Insurance Company, brought a declaratory judgment action to determine its liability under an insurance policy issued to defendant. The trial court held for the defendant and plaintiff appeals.

The record shows that the plaintiff insured the defendant, A. E. Watson, under a liability policy covering his premises and the operation of his farm.

While insured, the defendant and his wife entered into an agreement with the Department of Children and Family Services of the State of Illinois. Pursuant to this agreement, defandants received $300 per month to retain placement space in their home for six children. They agreed to accept, for temporary care up to five months, any child referred by the Department.

Customarily, defendant took two of the boys who were staying with him, to feed the cattle. The boys had asked to participate in this activity and took turns doing so. On September 17, 1967, one of the boys, James C. Foster III, accompanied defendant and was given a knife with which to cut the string on the bales of hay. As the boy was so engaged, he accidentally inflicted injury to his eye.

A complaint for injuries was filed on behalf of the boy against the Department, defendant, and his wife. The defendant tendered the claim to the plaintiff, a reservation of rights was entered into and thereafter plaintiff commenced the instant proceedings.

The plaintiff contends that the trial court erred in its interpretation of two exclusionary provisions of the policy. Excluded are liabilities arising out of any business pursuit of the insured and injuries incurred by any resident of the defendant’s household.

The policy defines “business” as a trade, profession or occupation other than farming and excludes:

“* * * any business pursuit of an insured, other than * * * activities therein which are ordinarily incident to non-business pursuits * *

Plaintiff claims that by reason of the agreement with the Department, the defendant was in the business of maintaining a foster home and that the injury to the boy was incident to that business rather than the farming operation. It is argued that part of the defendant’s duties under his arrangement with the Department was to train the children staying on the premises; that feeding of the cattle was part of that training and therefore, the injury occurred during and as a result of defendant’s business pursuits. The evidence reveals that helping to feed the cattle was a pleasure not a chore for the children and it was customary for the children to take turns in participating in this form of recreation. We agree with the trial court that the defendant was in the course of his non-business pursuit of farming and the cutting of the string on the bales of hay was an activity “ordinarily incident” to that non-business pursuit. See, State Farm Fire & Cas. Co. v. MacDonald (1967) 87 Ill.App.2d 15.

Plaintiff further claims that the boy was a resident of defendant’s household and therefore, excluded from coverage under the insurance contract. The policy does not cover injuries incurred by the insured, his spouse, or “residents of his household”. The trial court found the boy was not a resident of the defendant’s household. It should be emphasized at this point that we are here called upon to determine if the boy was a resident of the defendant’s household, not to determine his residence.

The plaintiff has correctly pointed out that “residence” has no fixed, exact meaning in the law, but varies with context and subject matter. Hughes v. Illinois Public Aid Com. (1954), 2 Ill.2d 374, 380. There has been no Illinois decision cited, nor has our research revealed a case, which has interpreted the phrase “resident of his household”; however, numerous Illinois cases have construed the term “resident” in a context other than as applied to insurance policies. These cases support the statement found in Routt v. Barrett (1947), 396 Ill. 322, 344, that, “The word resident’ is in common usage and is generally understood to mean one having more than mere physical presence.” The elements required beyond physical presence are intention and permanency of abode. Stein v. Cty. Bd. of School Trustees (1968), 40 Ill.2d 477-479; Pope v. Board of Election Comrs. (1938), 370 Ill. 196, 200-202; Bullman v. Cooper (1936), 362 Ill. 469, 476; Anderson v. Pifer (1924), 315 Ill. 164-167; and Hill v. Hill (1897), 166 Ill. 54-55.

The Court in Stein, supra, 479-480, held that intention is the controlling factor in determining whether a residence has been acquired or abandoned, and that intent is gathered primarily from the acts of a person.

In the instant case, testimony given by a social worker for the Department indicates it was never intended that any child placed in the defendant’s home would remain there permanently. The home was merely a “temporary care facility” used until permanent placement of a child could be made. It was stressed to the children that they would be moved from the home. Further testimony was given by the regional director of the Department who characterized the foster home operated by the defendant as a “diagnostic center” where the children were placed for a indeterminate period of time up to five months under the custodial agreement.

The testimony clearly indicates that the stay of the boy would be of a temporary nature and the critical element of intention to make the home his permanent abode was lacking. Therefore, it cannot be said that he became a “resident of the household”.

Other jurisdictions support the position that to be a “resident of the household” the element of permanency must be established. See, Great American Insurance Company v. Marshall (D. So. Car., 1967), 266 F. Supp. 208; Stadelmann v. Glen Falls Insurance Co. of Glen Falls (1967), 5 Mich. App. 536, 147 N.W.2d 460; Goodsell v. State Automobile and Casualty Under. (Sup. Ct. Iowa, 1967), 153 N.W.2d 458.

The judgment of the trial court was correct and must be affirmed.

Judgment affirmed.

GUILD and SEIDENFELD, JJ., concur.