author: JUSTICE HARTMAN

text:
    BEATRICE BOLDEN et al., Plaintiffs-Appellants, v. GENERAL ACCIDENT, FIRE AND LIFE ASSURANCE CORPORATION, LTD., d/b/a General Accident Group, Defendant-Appellee.
    First District (2nd Division)
    No. 82—1853
    Opinion filed November 8, 1983.

      Joseph L. Dombrowski and Marc E. Levine, both of Chicago, for appellants.
    Marsha Kay Ross and Willis R. Tribler, both of Haskell & Perrin, of Chicago, for appellees.
   JUSTICE HARTMAN

delivered the opinion of the court:

Plaintiffs appeal from an order sustaining defendant’s motion to dismiss their second amended complaint for failure to state a cause of action. The issue presented on appeal is whether plaintiffs’ second amended complaint failed to state a cause of action in promissory es-toppel.

Plaintiffs, injured in a multi-car collision on June 20, 1979, filed an unverified complaint on December 28, 1979, which alleged that they were beneficiaries of an agreement between Aetna Casualty & Surety Company (Aetna) and defendant General Accident, Fire and Life Assurance Corporation (General), insurers of two other parties to the collision, and that plaintiffs had been damaged by virtue of defendant’s breach of the agreement. Following General’s answer, which denied the existence of such an agreement, and motion to dismiss the complaint, an unverified amended complaint was filed on March 31, 1981, again based on the theory that plaintiffs were third-party beneficiaries of the agreement between the insurers. General filed another answer, which again denied that the agreement ever existed, and a motion to dismiss. Plaintiffs were granted leave to file a second amended complaint on August 18,1981.

The unverified, second amended complaint, the subject of this appeal, among other things, alleges that: General and Aetna entered into an agreement whereby each was to pay plaintiffs $20,000 to settle plaintiffs’ claims against their respective insureds; Aetna performed its obligations under the agreement; General is estopped from failing to perform its part of the agreement because plaintiffs have relied upon it to their detriment; General refused to honor plaintiffs’ request for payment; and plaintiffs were damaged in that they had released Aetna’s insured from any further claim and were also damaged in the amount of $20,000 by General’s breach of the agreement. The alleged agreement was not appended to the complaint.

General filed a motion to dismiss on August 28, 1981, alleging in relevant part that the second amended complaint fails to state a cause of action for promissory estoppel in that it fails to allege: (1) any promise made to plaintiffs; (2) plaintiffs’ reliance upon this promise; and (3) damages since plaintiffs did not release General’s insureds and had, in fact, brought suit against them during the pendency of the present litigation.

On June 25, 1982, the circuit court sustained General’s motion and dismissed, with prejudice, the second amended complaint for failure to state a cause of action. Leave to amend was denied after a colloquy between the court and plaintiffs’ counsel in which the latter acknowledged the absence of facts to support plaintiffs’ theory.

Plaintiffs’ second amended complaint sounds in promissory estop-pel. At the hearing on the motion to dismiss, plaintiffs’ attorney argued only as to the cause of action in promissory estoppel. Although the arguments in plaintiffs’ briefs exclusively address this theory, the conclusions of these briefs also refer to the alternative theory that plaintiffs were injured as third-party beneficiaries when General breached its agreement with Aetna. General’s brief does not address this alternative theory, and maintains that promissory estoppel was the sole theory attacked in its motion to dismiss.

As a general rule, prior, unverified pleadings are superseded by amended pleadings. (Burdin v. Jefferson Trust & Savings Bank (1971), 133 Ill. App. 2d 703, 269 N.E.2d 340.) Plaintiffs therefore cannot rely on the contents of their earlier complaints raising the third-party beneficiary theory to support their opposition to the motion to dismiss. (Cipolla v. Bloom Township High School District No. 206 (1979), 69 Ill. App. 3d 434, 388 N.E.2d 31.) The only matter properly to be considered by the circuit court upon the motion to dismiss was the second amended complaint, which sought to articulate an action based only upon promissory estoppel. The purpose of pleadings is to present, define, and narrow issues in order to limit the proof needed at trial (Pelham v. Griesheimer (1982), 92 Ill. 2d 13, 17, 440 N.E.2d 96, affd (1981), 93 Ill. App. 3d 751, 417 N.E.2d 882). Plaintiffs, having had two opportunities and almost two years to amend their pleadings, should have decided upon and perfected their theory of recovery. (See Knaus v. M.R.C. Finance Corp. (1945), 327 Ill. App. 214, 63 N.E.2d 671.) They abandoned the third-party beneficiary theory in favor of one now before us, promissory estoppel.

An action in promissory estoppel must assert the following elements: (1) an unambiguous promise; (2) reliance thereon by the party to whom the promise is made; (3) the reliance is expected and foreseeable by the party making the promise; and (4) the party to whom the promise is made in fact relies upon it to his or her injury. Dale v. Groebe & Co., Realtors (1981), 103 Ill. App. 3d 649, 653, 431 N.E.2d 1107; Illinois Valley Asphalt, Inc. v. J. F. Edwards Construction Co. (1980), 90 Ill. App. 3d 768, 413 N.E.2d 209; S.M. Wilson & Co. v. Prepakt Concrete Co. (1974), 23 Ill. App. 3d 137, 139, 318 N.E.2d 722.

In considering a motion to dismiss, a trial court must accept as true all well-pleaded facts, as well as any reasonable inferences that can be drawn from those facts. (Panorama of Homes, Inc. v. Catholic Foreign Mission Society, Inc. (1980), 84 Ill. App. 3d 142, 145, 404 N.E.2d 1104.) Plaintiffs allege that an agreement was made between General and Aetna; that plaintiffs relied upon this agreement; and that they were damaged by releasing Aetna’s insured from liability. Although it would be reasonable to infer that plaintiffs had knowledge of the agreement and that their release of Aetna’s insured was induced by this knowledge, the instant complaint makes no claim that General ever made any promise to them. Plaintiffs correctly concede that there are no cases in Illinois which have allowed anyone other than the promisee to proceed on a promissory estoppel theory. Here, plaintiffs were not promisees and therefore are not authorized to bring an action in promissory estoppel under present law. Levitt Homes, Inc. v. Old Farm Homeowners’ Association (1982), 111 Ill. App. 3d 300, 314-15, 444 N.E.2d 194; Dale v. Groebe & Co., Realtors (1981), 103 Ill. App. 3d 649, 653, 431 N.E.2d 1107; Brook v. Oberlander (1964), 49 Ill. App. 2d 312, 318,199 N.E.2d 613.

Plaintiffs suggest that Illinois law be changed to accommodate the rights of a third party with respect to a promise involving two other parties, by adopting the rule posited in section 90 of the Restatement (Second) of Contracts (1981), which provides in relevant part:

“A promise which the promisor should reasonably expect to induce action or forebearance on the part of the promisee or a third person and which does induce such action or forebearance is binding if injustice can be avoided only by enforcement of the promise.” (Emphasis added.)

The foregoing language squarely conflicts with case precedent on this issue. Although plaintiffs cite no cases from other jurisdictions which have accepted the third-party theory of recovery, several decided in other jurisdictions have done so. In Hoffman v. Red Owl Stores, Inc. (1965), 26 Wis. 2d 683, 698, 133 N.W.2d 267, 275, the Wisconsin Supreme Court, while adopting section 90, emphasized the necessity that the third-party beneficiary theory be applied only where it would serve to “avoid injustice,” the determination of which would be a policy decision of the court. In Hoffman, recovery by a third party was permitted where that party sold a building at a financial loss and where defendants had actually requested the sale. The same State court, again seeking to avoid injustice, later declined to apply the third-party beneficiary theory in Silberman v. Roethe (1974), 64 Wis. 2d 131, 218 N.W.2d 723, because plaintiff’s asserted loss as a result of his reliance could not be determined. The California supreme court applied the third-party theory to permit recovery on the basis of defendant’s affirmative representations in order to prevent “fraud upon one who has been deliberately led to rely thereon.” (Burgess v. California Mutual Building & Loan Association (1930), 210 Cal. 180, 188, 290 P. 1029, 1032.) Thereafter, recovery by third parties was permitted in California where their reliance involved leaving “their previous employment, investing and pledging their fortunes and securing the investments of others in substantial amounts.” Aronowicz v. Nalley’s, Inc. (1972), 30 Cal. App. 3d 27, 45, 106 Cal. Rptr. 424, 435; see Knapp, Reliance in the Revised Restatement: The Proliferation of Promissory Estoppel, 81 Colum. L. Rev. 52, 61-62 (1981).

In view of the substantial nature of the detriment apparent in these decisions, the instant case would not provide the best vehicle for effectuating a change in Illinois law, even if desirable, for several reasons. First, whether an agreement between General and Aetna actually existed is unclear. Second, plaintiffs have failed to adequately allege the requisite detriment. (Dale v. Groebe & Co., Realtors (1981), 103 Ill. App. 3d 649, 653, 431 N.E.2d 1107.) After section 90 of the Restatement of Contracts (1932) was adopted, its requirement of “action or forebearance of a definite and substantial character” was read to emphasize the necessity of an expenditure of funds or the incurring of a legal liability. In S.M. Wilson & Co. v. Prepaid Concrete Co. (1974), 23 Ill. App. 3d 137, 318 N.E.2d 722, the court focused on the “detrimental change of position because of the promise [as] *** an essential element if promissory estoppel is to apply.” (23 Ill. App. 3d 137, 141.) In that case, as well as in Illinois Valley Asphalt, Inc. v. J.F. Edwards Construction Co. (1980), 90 Ill. App. 3d 768, 413 N.E.2d 209, the change of position involved a financial loss to plaintiff contractor who, having relied on a bid by defendant subcontractor, was forced to engage another subcontractor after defendant refused to perform.

Plaintiffs urge that their delay in bringing suit against General’s insureds was a sufficient change in position as to invoke an estoppel. Significantly, plaintiffs make no claim that they were asked either to forego legal action or to delay in filing their lawsuit as in Redarowicz v. Ohlendorf (1981), 95 Ill. App. 3d 444, 420 N.E.2d 209, upon which they rely. That case, however, does not deal- with promissory estoppel but with a contract in which a promise to forego filing suit was held to be valid consideration. Delay in filing suit was considered in Wells v. Lueber (1976), 43 Ill. App. 3d 973, 358 N.E.2d 293, cited by both parties. There, settlement negotiations between an insurance company and plaintiff’s attorney took place in which the insurance company gave assurances that plaintiff’s claim would be settled without suit. The insurance company subsequently refused to settle, while the statute of limitations had expired. The court held that where the insurance company engages in “conduct calculated to lull the plaintiff into a reasonable belief that the case would be settled without suit and that the defense of the statute of limitations would not be asserted,” the insurer would be estopped from relying on the statute of limitations as a defense. (43 Ill. App. 3d 973, 975.) No such assurances were alleged by plaintiffs in the case at bar.

Furthermore, under Wells, mere delay in filing suit was not the principal basis for invoking estoppel; the delay complained of there permitted the statute of limitations to expire. In the case at bar, the statute of limitations had not expired and, in fact, plaintiffs had already brought suit against General’s insureds at the time the second amended complaint was filed. Moreover, in Wells, the insurer negotiated directly with plaintiff’s attorney; here, negotiations did not involve plaintiffs or their attorney. In fact, no contact of any kind between plaintiffs and defendant, prior to plaintiffs’ demand for payment, is alleged. Under the allegations in the instant complaint, General’s conduct cannot be characterized as an attempt to lull plaintiffs into believing that their case would be settled.

Other cases also suggest that delay in filing suit is an insufficient change of position to invoke estoppel. In Bank of Naperville v. Catalano (1980), 86 Ill. App. 3d 1005, 408 N.E.2d 441, plaintiff bank brought an action in restitution because it had mistakenly paid money to defendant. One theory proposed by defendant was that, in reliance on the payment, he had not filed suit against the bank on an unrelated transaction. The court found that because the unrelated claim was not barred by the statute of limitations, and no other injury had been shown, there was insufficient change of position to create an estoppel. In Falco, Inc. v. Bates (1975), 30 Ill. App. 3d 570, 334 N.E.2d 169, plaintiff, a motel owner, accepted a check from defendant in satisfaction of a debt owed to defendant by a third party, defendant’s friend. Plaintiff then refrained from bringing suit against the third party; instead, plaintiff sued defendant when the latter stopped payment on the check. The court rejected the trial court’s conclusion that plaintiff’s delay in filing suit, in using its innkeeper’s lien, or in preferring criminal charges against the third party, were of such a “definite and substantial character” as to invoke estoppel. 30 Ill. App. 3d 570, 571.

Plaintiffs argue that they suffered detriment by releasing Aetna’s insured from liability, since their case against General’s insureds thereby has been “greatly weakened.” The release of Aetna’s insured was part of a separate agreement supported by separate consideration: Aetna paid plaintiffs $20,000 in exchange for the release. Although plaintiffs are precluded from joining Aetna’s insured in their action against General’s insureds, there would be little problem, as General observes, in bringing Aetna’s insureds before the court to testify under subpoena.

Plaintiffs’ second amended complaint failed to state a cause of action in promissory estoppel and was properly dismissed. The dismissal order of the circuit court must therefore be affirmed.

Affirmed.

STAMOS and PERLIN, JJ., concur.


source: Caselaw Access Project

author: JUSTICE MEJDA

license: Public Domain

text:
    CHICAGO TRIBUNE COMPANY, Plaintiff-Appellee, v. J. THOMAS JOHNSON, Indiv. and as Director, Department of Revenue, et al., Defendants-Appellants—(Rockwell Graphic Systems, Inc., Intervening Plaintiffs-Appellees).
    First District (5th Division)
    No. 82—2129
    Opinion filed November 10, 1983.

      Neil F. Hartigan, Attorney General, of Springfield (Paul J. Bargiel, Special Assistant Attorney General, of counsel), for appellants.
    Reuben & Proctor, of Chicago (Don H. Reuben, William G. Schopf, Jr., William C. Schmidt, Andrew Butz, and Andrew H. Connor, of counsel), for appellees.
   JUSTICE MEJDA

delivered the opinion of the court:

Defendants, the Illinois Department of Revenue, the State Treasurer, and the Director of the Department of Revenue, appeal from the judgment of the circuit court which held that plaintiff, Chicago Tribune Company, met the statutory requirements for an exemption from the Use Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 439 et seq.), and that the monies which plaintiff had paid into a protest fund must be invested and the interest earned thereon paid to the prevailing party. Defendants seek reversal of both rulings. For the reasons which follow we reverse the judgment of the circuit court.

At issue is the proper construction of the Use Tax Act which provides, in part, that a “tax is imposed upon the privilege of using in this State tangible personal property ***.” (Ill. Rev. Stat. 1981, ch. 120, par. 439.3.) Plaintiff has recently purchased several new printing presses and other machines for use in the printing of the Chicago Tribune. Neither party has questioned whether these machines are within the scope of the proviso imposing the use tax. Plaintiff asserts, and the circuit court held, that the machinery is not subject to use tax because it qualifies for the following statutory exemption:

“The tax imposed by this Act does not apply to the use of machinery and equipment primarily in the process of the manufacturing or assembling of tangible personal property for wholesale or retail sale or lease ***.” (Ill. Rev. Stat. 1981,.ch. 120, par. 439.3.)

Defendants conceded at oral argument that plaintiff’s machinery is used in “manufacturing or assembly,” but they contend that the newspapers which result from that manufacturing process are not “tangible personal property” for sale or lease within the meaning of the exemption.

The circuit court’s memorandum opinion contained an extensive factual discussion; the nature of our decision, however, obviates the need for a lengthy factual discourse in this opinion. It is sufficient to note that two witnesses testified to the various procedures which comprise the printing of the Chicago Tribune. The trial court found, as a matter of fact, that the publication of a newspaper results in “tangible personal property.” Although the Use Tax Act does not define “tangible personal property,” the Retailers’ Occupation Tax Act (Ill. Rev. Stat. 1981, ch. 120, par. 400 et seq.) provides explicitly that “[t]he purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news (with or without other information) is not a purchase, use or sale of tangible personal property.” (Ill. Rev. Stat. 1981, ch. 120, par. 440.) The defendants urge that, as a matter of law, a newspaper is not “tangible personal property” for sale by virtue of the definition in the Retailers’ Occupation Tax Act.

Before discussing the merits of this argument, we must consider the plaintiff’s contention that the defendant Department of Revenue admitted in the trial court that individual Chicago Tribunes are tangible personal property. This assertion is based on a letter from the chief of the revenue litigation division of the Attorney General’s office. This letter stated in relevant part that “this office is prepared at this time to stipulate only to paragraphs 1 through 4 and 43 through 50 of your proposed draft [stipulation].” Paragraph 50 of the proposed stipulation provided that “[e]ach item of machinery and equipment purchased by Tribune *** is used primarily in the production of Chicago Tribunes, which are tangible personal property.” In our view, the “prepared to stipulate” language of the letter in question does not constitute a sufficiently definite agreement to stipulate to the proposed facts. (See City of Rolling Meadows v. Kohlberg (1980), 83 Ill. App. 3d 10, 16, 403 N.E.2d 1040; see also 34 Ill. L. & Prac. Stipulations sec. 2 (1958).) Accordingly, we conclude that no valid stipulation was entered into at the trial level. We will therefore consider the defendants’ argument.

The defendants assert that the phrase “tangible personal property” is a term of art which has the same meaning wherever it is used. The plaintiff responds that the Use Tax Act and the Retailers’ Occupation Tax Act are two completely different statutes with entirely different purposes, and therefore a definition in one may not validly be applied to the construction of the other. The interrelationship between the Use Tax Act and the Retailers’ Occupation Tax Act cannot be so easily dismissed, however. Our supreme court has held that the basic purposes of the Use Tax Act “are to complement the Retailers’ Occupation Tax Act by preventing the evasion of tax on purchases made outside the State and to equalize the competitive disadvantage of Illinois retailers who face retailers’ occupation tax liability. (Illinois Road Equipment Co. v. Department of Revenue (1965), 32 Ill. 2d 576, 580.)” (United Air Lines, Inc. v. Johnson (1981), 84 Ill. 2d 446, 450, 419 N.E.2d 899; see also American Airlines, Inc. v. Department of Revenue (1974), 58 Ill. 2d 251, 252, 319 N.E.2d 28; Howard Worthington, Inc. v. Department of Revenue (1981), 96 Ill. App. 3d 1132, 421 N.E.2d 1030.) Plaintiff’s argument focuses exclusively on the latter purpose, while disclaiming the legitimacy of the former. The supreme court has indicated, however, that the Use Tax Act and the Retailers’ Occupation Tax Act together comprise a comprehensive legislative system for the taxation of the sale, purchase, and use of tangible personal property.

“The Use Tax Act complements the Retailers’ Occupation Tax Act in such a fashion so that an Illinois retailer who collects the use tax as an agent of the State is correspondingly relieved of his retailers’ occupation tax liability on the transaction. [Citation.] On the other hand, purchasers who seek to avoid having the retailers’ occupation tax liability passed on to them by buying goods outside the State face use tax liability on goods they bring into Illinois.” (United Airlines, Inc. v. Johnson (1981), 84 Ill. 2d 446, 450-51, 419 N.E.2d 899.)

While this interrelationship is not of itself determinative of the question before us, it does provide a basis for rejecting the plaintiff’s argument that the two statutes are independent of one another.

“ '*** Statutes which relate to the same thing or to the same subject or object are in pari materia although they were enacted at different times. It is a primary rule of statutory construction that not only should the intention of the legislature be deduced from a view of the whole statute and from its every material part, but statutes in pari materia should be construed together.’ People ex rel. Harrell v. Baltimore and Ohio Railroad Co. 411 Ill. 55, 58 and 59.” (People ex rel. Nordstrom v. Chicago & North Western Ry. Co. (1957), 11 Ill. 2d 99, 106, 142 N.E.2d 26.)

Because the Use Tax Act was enacted as a complement to the Retailers’ Occupation Tax Act and because both statutes implement the legislature’s plan for the taxation of transfers of tangible personal property, we conclude that the two statutes are in pari materia. Construing the two statutes together, we conclude that the legislative exclusion of newspapers from the definition of tangible personal property in the Retailers’ Occupation Tax Act may be applied to define that same term in the Use Tax Act. (See People ex rel. Scott v. Schwulst Building Center, Inc. (1982), 89 Ill. 2d 365, 372, 432 N.E.2d 855.) Under the definition adopted by the legislature, plaintiff as a matter of law does not produce items of tangible personal property. Accordingly, plaintiff does not qualify for the exemption from the use tax.

We note that plaintiff’s presentation in the trial court was designed to prove that individual copies of the Chicago Tribune were tangible items of personal property within the dictionary definition of those terms. But the legislature is not bound to follow commonly recognized meanings of terms or existing definitions created by persons in other fields. (People v. McCarty (1981), 86 Ill. 2d 247, 254, 427 N.E.2d 147.) When the legislature has defined a term, it is our duty to apply that definition and not some other which might appear to be more plausible.

Plaintiff contends that our construction of the statute is inappropriate in light of the legislative purpose of the exemption. Plaintiff relies on Time Inc. v. Hulman (1964), 31 Ill. 2d 344, 201 N.E.2d 374, in which our supreme court articulated the rationale of the newsprint exemption from the retailers’ occupation tax as “to prevent discrimination against newspapers in favor of radio and television, which furnish news and other information, but do not transfer tangible personal property.” (31 Ill. 2d 344, 351, 201 N.E.2d 374.) Plaintiff asserts that this same rationale applies to the use tax and that the exemption from that tax should be construed to apply to the newspaper business. Plaintiff’s argument overlooks an important distinction between the use tax and the retailers’ occupation tax, however. The latter tax is imposed on the transfer of tangible personal property; because the electronic media do not present information in a tangible form and the print media do so, the tax imposed on the transfer of tangible personal property would discriminate against the print media in the absence of an exemption. Interestingly, the exemption from the retailers’ occupation tax does not provide that newspapers are exempt from the tax, but only provides that newspapers receive the same treatment as the electronic media: “The purchase, employment and transfer of such tangible personal property as newsprint and ink for the primary purpose of conveying news *** is not a purchase, use or sale of tangible personal property.” (Ill. Rev. Stat. 1981, ch. 120, par. 440.) In contrast to the retailers’ occupation tax, the use tax is imposed on the use of tangible personal property. This distinction achieves significance in the context of the news media because, while the electronic media do not transfer information in a tangible form and the print media do, both forms of media utilize machinery to transmit that information. It is this machinery which is the subject of the use tax and, within the ambit of that tax, the differences in which the various media communicate information do not result in differential tax treatment. Accordingly, the rationale of Time Inc. v. Hulmán is inapplicable to the instant case and does not, therefore, mandate the application of the exemption from use tax to plaintiff.

Plaintiff also contends that the principal objective of the legislature in enacting the use tax exemption for manufacture of tangible personal property was to encourage the expansion of industry within the State and to discourage the exodus of businesses from the State by exempting the purchase of manufacturing machinery from the use tax. Plaintiff argues that in order to implement this legislative purpose the exemption from the use tax should be construed to apply to sales of printing machinery and equipment to newspapers. The defendants point out that other industries which meet the letter of the exemption are subject to the Retailers’ Occupation Tax Act, unlike plaintiff. Plaintiff responds that a more specific exemption in the Use Tax Act could have provided for an exemption for property which, when sold at retail, generates retailers’ occupation tax liability. But our holding is not based on the defendants’ formulation of the legislative rationale that an article must be subject to the retailers’ occupation tax in order to qualify for the exemption from the use tax. Rather, we rely on the plain language of the definition excluding transactions of newsprint from the scope of the phrase “tangible personal property.” (Ill. Rev. Stat. 1981, ch. 120, par. 440.) While plaintiff’s argument derives some support from the apparent policy concerns of the statute, “a statute which exempts property from taxation should be strictly construed in favor of taxation and *** a party claiming an exemption has the burden to prove clearly and conclusively that he is entitled to the exemption. [Citation.] In determining whether an exemption is applicable, every presumption is against the intention of the State to exempt property from taxation.” (Telco Leasing, Inc. v. Allphin (1976), 63 Ill. 2d 305, 310, 347 N.E.2d 729; see also United Air Lines, Inc. v. Johnson (1981), 84 Ill. 2d 446, 455-56, 419 N.E.2d 899.) Plaintiff’s argument does not persuade us that the legislature intended to exempt its machinery from the imposition of the use tax.

Plaintiff next contends that our construction of the statute violates its rights under the first amendment to the United States Constitution. Defendants respond that this proposition was not argued to the trial court and is therefore waived. (See Kravis v. Smith Marine, Inc. (1975), 60 Ill. 2d 141, 147, 324 N.E.2d 417.) “Nonetheless, the appellee may advance any argument supported by the record to sustain the judgment of the trial court [citation], and the reviewing court may affirm the trial court when justified in law for any reason [citation].” (Ozment v. Lance (1982), 107 Ill. App. 3d 348, 350, 437 N.E.2d 930.) Plaintiff’s argument contemplates a legal determination not rebuttable merely by the introduction of evidence at trial. Our consideration of that argument in the absence of its presentation to the trial court (and the concomitant opportunity to introduce proof in opposition thereto) will not, therefore, prejudice defendants. (See Sheldon v. Colonial Carbon Co. (1983), 116 Ill. App. 3d 797, 803.) We will accordingly consider plaintiff’s argument on its merits.

Plaintiff relies on the recent decision of the United States Supreme Court in Minneapolis Star & Tribune Co. v. Minnesota Commissioner of Revenue (1983), 460 U.S. 575, 75 L. Ed. 295, 103 S. Ct. 1365. That case is inapposite to the instant case, however, because Minnesota “has not chosen to apply its general sales and use tax to newspapers. Instead, it has created a special tax that applies only to certain publications protected by the First Amendment.” (460 U.S. 575, 581, 75 L. Ed. 2d 295, 302, 103 S. Ct. 1365, 1370.) The statute at issue in the case sub judice is a general statute which applies to all enterprises. While the legislature has exempted some areas of commerce from the provisions of the tax, the exemptions are not so pervasive that we could characterize them as rendering the proviso for taxation “facially discriminatory.” (See 460 U.S. 575, 581, 75 L. Ed. 2d 295, 302, 103 S. Ct. 1365, 1370.) Accordingly, we conclude that our construction of the Use Tax Act does not infringe plaintiff’s rights under the first amendment.

In summary, the exemption for manufacturing of tangible personal property does not apply to plaintiff because, as a matter of law, its operations do not produce tangible personal property. This holding does not conflict with the proscriptions of the first amendment. Because our holding provides an adequate basis for reversing the judgment of the trial court, we need not consider the defendants’ argument concerning investment of the monies in the protest fund. For the foregoing reasons, the judgment of the circuit court is reversed.

Reversed.

WILSON, RJ., and LORENZ, J., concur.


author: PRESIDING JUSTICE WEBBER

text:
    DECATUR PRODUCTION CREDIT ASSOCIATION, Plaintiff-Appellant, v. GEORGE E. MURPHY et al., Defendants-Appellees—(The Illinois National Bank, Defendant).
    Fourth District
    No. 4—83—0158
    Opinion filed November 3, 1983.

      Wayne L. Bickes and Jeffrey D. Richardson, both of Rosenberg, Rosenberg, Bickes, Johnson & Richardson, Chartered, of Decatur, for appellant.
    John L. Swartz, of Giffin, Winning, Lindner, Newkirk, Cohen & Bo-dewes, P.C., of Springfield, for appellee Herrin, Ltd.
    Mark Rabin, of Springfield, for appellees Rolin C. Carr and Colleen K. Carr.

      Richard A. Hollis, of Springfield, for appellee George E. Murphy.
   PRESIDING JUSTICE WEBBER

delivered the opinion of the court:

This' appeal presents some novel questions concerning priorities in growing crops under the pertinent sections of the Uniform Commercial Code (UCC). (Ill. Rev. Stat. 1981, ch. 26, pars. 9-203, 9-204, 9-403, 9 — 312.) Plaintiff, Decatur Production Credit Association (PCA), was a secured creditor of the defendant debtor, George E. Murphy (Murphy). Defendant Rolin C. Carr (Carr) and Murphy had entered into a written agreement concerning the operation of the farm lands in which Murphy had an interest as a tenant on a crop-share basis as to the bulk of them and on a cash-rent basis as to the rest. Defendant Herrin, Ltd., furnished certain chemical products to Murphy for use in his farming operations. Defendant Illinois National Bank was a secured creditor of Carr, but has not participated in this appeal.

PCA filed suit for declaratory judgment in the circuit court of Sangamon County, seeking a declaration of its rights in the 1982 crops growing on the lands farmed by Murphy. In summary, the trial court held that Carr was entitled to one-fourth of the crops under his agreement with Murphy; that as to Murphy’s one-fourth, Herrin, Ltd., had a paramount lien of $20,000 plus 18% interest, and that PCA had a lien on the balance of Murphy’s interest to the extent of $116,080.80 plus interest at $41.6023 per day and attorney fees. The derivation of the figure representing PCA’s lien is so obscure in the record as to defy rational analysis.

PCA has appealed the trial court’s order. We affirm in part, reverse in part, and remand for an accounting.

The evidence at trial was not seriously controverted, but some recitation of it is necessary to an understanding of the case. Murphy had farmed for a number of years in the Springfield area. He apparently owned some tracts himself but they are not concerned in this litigation. On the tracts which are concerned, he held farm leases which were of the 50/50 crop-sharing nature, except for one tract, known as the Mendenhall property, which was on a cash-rent basis of $100 per acre. Murphy had financed his operations for many years through PCA, a federally chartered corporation and a part of the Federal farm credit system.

On or about March 27, 1981, Murphy signed a farm security agreement with PCA for the “crops: corn, soybeans and wheat which are now or will during the term of this Security Agreement become growing upon” certain tracts of land located in Sangamon County as follows:

“Bridges, 162 acres in Sections 20/29;
Shuck, 85 acres in Section 16;
Pearson, 268 acres in Sections 21/22;
Mendenhall, 120 acres in Section 20;
Neuman Estate, 34 acres in Section 21.”

Other collateral included “farm products, stored grain” and a list of certain farm machinery, as had been customary over more than 20 years of doing business. Murphy signed the security agreement, financing statement, note and mortgage before PCA approved the loan. The loan for operating expenses was annual; each year the parties met to review payments of past due accounts and needs for the upcoming crop year, including personal living expenses of Murphy.

For 1981 PCA approved a total of $361,249.08 represented by a note due January 1, 1982. A portion of this represented renewal of old loans. Collateral for the note included the 1980 crops on hand, sale of the 1981 crops produced upon the foregoing acreage, and the sale of Murphy’s farm machinery which was to take place following the 1981 harvest. Murphy also gave PCA a mortgage on his personal residence as further security. A financing statement in connection with the security agreement and covering the above-described tracts was filed with the recorder of Sangamon County on April 22,1981.

PCA had determined that it would no longer finance Murphy after the 1981 crop year. Unquestionably he was in serious financial difficulties. The sale of the machinery was an important part of the scheme to pay off his loan, but without the machinery he could not continue farming.

Prior to the sale of the machinery, which occurred on March 30, 1982, Murphy had a discussion with Carr concerning farming operations. Murphy still had the leases on the approximately 667 acres described above. The gist of the discussion was that Carr would furnish the equipment and part of the labor for farming the tracts and in return would receive one-fourth of the crop. In order to purchase the machinery, Carr negotiated a loan from the Elinois National Bank for which he gave a security agreement; his financing statement with the Bank purported to cover his share of the 1982 crop on the Men-denhall, Pearson and Shuck tracts. As previously indicated, Illinois National Bank has not pursued this appeal, and we shall therefore ignore whatever interest it may have.

Murphy planted and harvested the 1981 crop, of which he sold a portion and stored a portion. During that year he paid PCA $62,543; however, PCA made no effort to call or accelerate the note due Jan-nary 1, 1982. The machinery sale brought a total of $163,065, and this was paid over to PCA after the sale in March 1982. Carr purchased $24,000 of the machinery.

Prior to April 1, 1982, Murphy approached defendant Herrin, Ltd., with regard to furnishing fertilizer, chemicals, and other farming materials for the 1982 crop year. John E. Herrin, manager of Herrin, Ltd., testified that he prepared a note and financing statement and security agreement which Murphy signed. Herrin started delivering materials to Murphy on April 1, 1982. Prior to entering into the agreement with Murphy, Herrin did not cause anyone to make a check of the recorder’s office to see if Murphy had pledged the 1982 crop to someone else. Herrin testified that he was aware that PCA had loaned money to Murphy. Herrin recorded its financing statement with the Sangamon County Recorder on April 12,1982.

The security granted to Herrin, Ltd., was in the following traces:

“OWNER LOCATION
Shutt [sic] Farm approximately 100 acres
Sec. 16, T.15, R.5 W Sangamon County
Pearson approximately 280 acres
Sec. 22, T.15, R.5 W Sangamon County
Mendenhall approximately 259 acres
Sec. 29, Sec. 20, T.15, R.5 W Sangamon County.”

Sometime in April 1982 Murphy and Carr entered into a written agreement, apparently formalizing their prior discussion. In pertinent part that agreement provided:

“1. Murphy will provide leased land, herbicides, fertilizer, insecticides, seeds, any other necessary chemicals, a grain truck and grain storage bins for at least 10,000 bushels and approximately one-half the labor for general farming.
2. Carr will acquire and furnish the equipment necessary to farm at least five hundred (500) acres for the raising of a com and bean crop and Carr shall furnish one-half of the labor nec: essary for the soil preparation, planting, cultivating and harvesting of said crop.
3. Murphy and Carr will jointly share equally in the tenants portion of the crop or profits that the tenant is entitled to under the terms of the leases that Murphy has acquired from various land owners, it being acknowledged by Murphy that the leases provide and grant to the tenant fifty (50%) percent of the annual crops of profits realized from crops.”

Murphy testified that he believed he could make the agreement because the leases were his. PCA knew nothing of the agreement. Carr testified that he had had no relationship with the landlords and did not even know what the rent arrangements were. Murphy lost the Bridges tract for 1982 but gained an additional 159 acres from the Mendenhall property. All of the leases were on a 50/50 share basis except the Mendenhall, which was cash rent of $100 per acre. Murphy testified that he had paid Mendenhall $13,750 and still owed him a like amount. Notwithstanding the complications which might ensue, the trial judge, with the agreement of counsel, decided to treat the Mendenhall tract as if it were a 50/50 share basis lease.

Murphy then embarked on the production of the 1982 crop. He had the agreement with Carr and had obtained the fertilizer and other chemical products from Herrin, Ltd. He sold some property not covered by the PCA security agreement and also took funds from his savings. With these asserts in hand, he informed PCA on May 1, 1982, that he intended to continue farming during that year. On May 5, 1982, while running a routine check, PCA discovered the financing statement to Herrin, Ltd. Shortly afterwards it also discovered Carr’s financing statement to Illinois National Bank for the purchase of the machinery and covering the same tracts as described in its security agreement. Murphy told PCA on July 19, 1982, that he had an arrangement with Carr but that Carr had no interest in the 1982 crop other than payments for the leasing of his equipment on an hourly basis.

On July 29, 1982, Murphy met with PCA with a view to obtaining additional funds for operating expenses. He applied for a loan of $10,248 to be added to the principal then outstanding. It seems clear from the record that he misrepresented the value of grain on hand and the amount of his indebtedness for fertilizer and chemicals. He signed a note, a security agreement, and a new financing statement which covered the additional Mendenhall land which he had acquired under lease. The financing statement was recorded August 9, 1982, and PCA’s loan committee then denied the application on August 12, 1982.

Murphy, Carr, and Herrin, Ltd.’s officer all testified that without their contributions the 1982 crop could not have been raised.

On September 12, 1982, PCA brought this declaratory judgment action seeking an order as to the respective rights of the parties in the 1982 crop; it also sought a preliminary injunction against the transfer of any of the crop until the rights had been determined. On September 27, 1982, an order was entered allowing Carr to harvest the crop and store it during the pendency of the suit. He was also to be allowed the expenses of harvesting, transporting, and storing the crop.

The trial court entered its written findings of fact and judgment order on December 3, 1982. It found that Murphy was free to enter into any kind of assignment or subleasing arrangement with regard to his leases and only the landlords had standing to object to such procedures; that the agreement with Carr was an assignment or sublease; and that Carr took free of any security interest because such a security interest was in the crop, not in the leases. Therefore Carr was entitled to one-fourth of the 1982 crop and was responsible for contract farming services rendered by others in the harvesting thereof.

As to Murphy, it found that he was entitled to one-fourth of the 1982 crop, subject to PCA’s lien and that PCA’s lien was subject to that of Herrin, Ltd. It further found that PCA’s lien extended only to the crop grown on the tracts described in the March 1981 security agreement and that the July 1982 security agreement from Murphy to PCA was invalid.

As to Herrin, Ltd., it found that its security interest attached to Murphy’s one-fourth share in the crop grown on the tracts described in its agreement of April 9, 1982, and was superior to that of PCA because it had provided new value. Its lien was limited to the amount of its note, $20,000, and not to an open account with Murphy.

PCA was allowed its attorney fees against Murphy and Herrin, Ltd.’s fees were denied since no default had been declared on its note.

We hold that the trial court was in error in awarding Carr one-fourth of the 1982 crop free of liens; that it was correct in awarding PCA a lien upon the 1982 crop grown on the tracts described in the March 1981 agreement; and that it was in error in awarding Herrin, Ltd., its lien, subject, however, to a determination upon remand as will be further explained.

A basic issue upon which much else in this case depends is whether the security agreement of March 1981 extends PCA’s lien to the 1982 crop. Section 9 — 203 of the UCC provides in pertinent part:

“[A] security interest is not enforceable against the debtor or third parties with respect to the collateral and does not attach unless
(a) *** the debtor has signed a security agreement which contains a description of the collateral and in addition, when the security interest covers crops growing or to be grown *** a description of the land concerned; and
(b) value has been given; and
(c) the debtor has rights in the collateral.”

Ill. Rev. Stat. 1981, ch. 26, par. 9 — 203.

This provision was substituted in the UCC in 1972 for various prior sections which dealt with the subject in a much different manner. (See Ill. Ann. Stat., ch. 26, par. 9 — 203, Illinois Code Comment, at 105 et seq. (Smith-Hurd 1974)) (Comment).) Prior section 9 — 204(2) (Ill. Rev. Stat. 1969, ch. 26, par. 9 — 204(2)) dealt with the matter in a negative way; it set forth specific situations in which a debtor had no rights in the collateral until a certain event occurred. (Comment, at 107.) Regarding crops, prior section 9 — 204(4)(a) (Ill. Rev. Stat. 1969, ch. 26, par. 9 — 204(4)(a)) specifically provided that no security interest could attach in crops which became such more than one year after the execution of the security agreement. All this was swept away by the 1972 amendment which specifically added the language [crops] “growing or to be grown.” Comment, at 107.

Section 9 — 204(1) of the UCC (Ill. Rev. Stat. 1981, ch. 26, par. 9 — 204(1)) also bears on the issue. It provides in pertinent part: “[A] security agreement may provide that any obligations covered by the security agreement are to be secured by after-acquired collateral.” The Uniform Commercial Code Comment (Ill. Ann. Stat., ch. 26, par. 9 — 204, at 117 (Smith-Hurd 1974)) states that this subsection makes clear that after-acquired collateral has an equal status with collateral in which the debtor has rights at the time value is given. The Illinois Code Comment (Ill. Ann. Stat., ch. 26, par. 9 — 204, at 116 (SmithHurd 1974)) specifically relates this provision to future crops.

The history of the 1972 amendments is well summarized in Meyer, “Crops” as Collateral for an Article 9 Security Interest and Related Problems, 16 U.C.C. L.J. 3,11 — 13 (1982), as follows:

“In order to have an enforceable security interest under the 1972 Code, even between the debtor and the secured party, the security interest must attach to the appropriate collateral. The three basic requirements for attachment are found in Section 9 — 203 of the 1972 Code and Section 9 — 204 of the 1962 Code. Under both versions of the Code, there has to be an agreement creating a security interest in the crops. Since the secured party will generally not have possession of the crops, there must be a written agreement describing the collateral. The second requirement under both versions is that there must be value given.
While in both versions the debtor must have rights in the collateral, each is considerably different as far as growing crops are concerned. Under 1962 Section 9 — 204(2)(a), the debtor has no rights in crops until they are planted or otherwise become growing crops. The 1972 Code eliminated this section as unnecessary. The 1972 version provides that a debtor can create a security interest in crops to be grown. Section 9 — 204(4)(a) of the 1962 Code was also eliminated by the 1972 Code. It provided:
No security interest attaches under an after-acquired property clause
(a) to crops which become such more than one year after the security agreement is executed except that a security interest in crops which is given in conjunction with a lease or a land purchase or improvement transaction evidenced by a contract, mortgage or deed of trust may if so agreed attach to crops to be grown on the land concerned during the period of such real estate transaction.
This subsection has been considered by many to be a significant limit on the ‘floating lien’ in that it generally prohibits a security interest under an after-acquired property clause from covering crops planted more than one year after the security agreement was executed. This means that, in a 1962 state, a crop lender must execute a new security agreement every year to cover the annual crop production loans or other financial arrangements. Yet, a financing statement needs to be filed only once every five years. This in part prompted the elimination of this section in the 1972 Code. The specific reasons given for the elimination of the provision in the 1972 Code are:
The obvious purpose of this provision was to protect a necessitous farmer from encumbering his crops for many years in the future. The provision did not work because there was no corresponding limit on the scope of a financing statement covering crops, and under the Code’s notice-filing rules the priority position of a security arrangement covering successive crops would be as effectively protected by the filing of a first financing statement whether the granting clause as to successive crops was in one security agreement with an after-acquired property clause or in a succession of security agreements. On the other hand the clause did require an annual security agreement for crops even when the encumbrance on crops was agreed to as part of a long-term financing covering farm machinery and other assets. The provision thus appeared to be meaningless in operation except to cause unnecessary paperwork, but it did introduce some element of uncertainty as to its purpose.
Under the 1972 Code, it seems clear that a security interest can be created in crops to be grown and the security agreement can cover crops that will be grown in the future. Accordingly, a security agreement involving crops in a 1972 state does not have to be executed every year. In effect, it could go on forever if the financing statement is renewed properly.”

Based on these principles, we think it clear that PCA acquired a lien on the 1982 crop, but only on such as was grown on the tracts described in the March 1981 security agreement. Murphy signed a security agreement which covered crops “which are now or will during the term of this security agreement become growing.” The security agreement further provided, “[T]he collateral therein granted continues as security for the debtor’s indebtedness to secured party both present and future and whether such collateral be on hand or hereafter acquired.” These provisions reasonably identify the fact that all future crops on the tracts concerned will be subject to the security interest. Murphy was given value, $361,744.08, representing renewal of old loans plus operating funds. The third element, rights of the debtor in collateral, seems clear. Murphy had his leases on the tracts upon which the 1982 crop was to be grown. Thus the three requirements of section 9 — 203(1) of the UCC were satisfied.

The same is not true of the August 1982 security agreement and financing statement which was an attempt to bring the additional Mendenhall acreage in as collateral. No value was given. As was indicated above, PCA took the note, agreement and statement and then refused the loan. Its lien on the 1982 crop extends only to such as was raised on the tracts described in the March 1981 document. The trial court correctly held the August 1982 agreement to be a nullity.

Murphy has argued that the true test is to look at the course of dealing between himself and PCA over the years; that is, yearly arrangements had been made over a long period of time. Such an argument might have some substance if the wording of the security agreement were ambiguous. As its stands, the agreement expressly includes future crops and there is no necessity to resort to extrinsic circumstances to determine its meaning.

We turn next to the situation regarding Carr. The result necessarily depends upon the nature of his agreement with Murphy. The trial court held it to be either an assignment or a sublease. We do not agree. The pertinent portions have been set forth above, and it appears to us that it was a contract for personal services for labor and material, or essentially for custom farming. The agreement describes no real estate and its only reference to leaseholds is in one of the recitals which states, “Whereas, Murphy has been engaged in the business of farming for many years and has acquired the right to various lease agreements to lease certain real estate in Sangamon County, Illinois, on a year-to-year basis.” It further provides that “Murphy and Carr will jointly share equally in the tenants [sic] portion of the crop ***.” ]q0 right or interest in real estate was transferred, only an agreement to share profits in crops. The subject matter of the agreement was crops, not land.

We have already held that Murphy held the 1982 crop as collateral and had rights in it. A transfer of collateral in contravention of a security agreement is a valid transfer (Ill. Rev. Stat. 1981, ch. 26, par. 9 — 311), but the transfer does not occur free of a creditor’s security interest (Ill. Rev. Stat. 1981, ch. 26, par. 9 — 306), and only the debtor’s rights enure to the transferee. Martin Brothers Implement Co. v. Diepholz (1982), 109 Ill. App. 3d 283, 440 N.E.2d 320.

It follows that Carr has no priority over PGA whose lien became superior by virtue of the March 1981 security agreement. The record discloses that Carr made no search at the time of signing the agreement with Murphy, or before signing, to determine whether Murphy had already given any liens upon the 1982 crop; neither did he cause his attorney to make such a search. Murphy had told Carr that he had not pledged the grain.

Carr has argued that he should recover on a theory of quantum meruit. We do not agree. That theory is part of the remedial devices of implied contract. An implied contract cannot stand in the face of an express one. A third party cannot be held liable under an implied contract for work done under an explicit contract between two different parties merely because the third party benefited from the work. Stewart v. McIntosh (1942), 316 Ill. App. 212, 44 N.E.2d 451; Vanderlaan v. Berry Construction Co. (1970), 119 Ill. App. 2d 142, 255 N.E.2d 615.

Carr has also argued that PCA pursued a “course of dealing” by which it waived its lien; that is, refusing to finance Murphy after 1981, then discovering that he was still farming, that Herrin, Ltd., was providing fertilizer and chemicals, and that Carr was providing machinery and labor, and yet not foreclosing on a note due six months previously but waiting until the crop was growing. While Carr denominates this as a course of dealing, in our opinion the argument is really one of bad faith. Truly, PCA’s actions are not to be commended. In addition to the facts recited above, we are disturbed by its transparent attempt to blanket in the additional Mendenhall acreage by obtaining the second security agreement and then refusing the loan. While we feel that its actions deserve reprimand, they are not so egregious as to amount to bad faith.

As to the waiver argument, we again decline to pass upon whether it exists in this State. (Compare Farmers State Bank v. Webel (1983), 113 Ill. App. 3d 87, 446 N.E.2d 525.) In any event, the “sequence of previous conduct” required by section 1 — 205(1) of the UCC (Ill. Rev. Stat. 1981, ch. 26, par. 1 — 205(1)) is scarcely present here. We have already rejected it as part of Murphy’s argument as being germane to the issues here and as part of Carr’s bad-faith argument.

Lastly, we turn to the priority, if any, of Herrin, Ltd.’s lien. This is governed by section 9 — 312(2) of the UCC, which provides:

“A perfected security interest in crops for new value given to enable the debtor to produce the crops during the production season and given not more than three months before the crops become growing crops by planting or otherwise takes priority over an earlier perfected security interest to the extent that such earlier interest secures obligations due more than six months before the crops becoming growing crops by planting or otherwise, even though the person giving new value had knowledge of the earlier security interest.” Ill. Rev. Stat. 1981, ch. 26, par. 9 — 312(2).

Many commentators have been critical of this section. In White and Summers, Uniform Commercial Code sec. 25 — 6, at 1052 (2d ed. 1980), it is said in commenting on section 9 — 312(2): “[T]he drafters endeavored to codify priority disputes with respect to fixtures; apparently they lacked the will or the courage to tackle the analogous crop problem.”

In Meyer, “Crops” as Collateral for an Article 9 Security Interest and Related Problems, 15 U.C.C. L.J. 3, 47 (1982), it is said: “Section 9 — 312(2) is probably the strangest priority rule in the Code.”

Two principal difficulties present themselves in applying this section to the instant case. First, the record is entirely unclear when the 1982 crop was planted on the various tracts. Murphy’s notes in the record indicate that some beans were planted in July, but they do not establish how many acres, or which acres, were so planted. Second, the record is equally obscure as to how much of Murphy’s obligation to PCA was due on January 1, 1982. As to the latter, White and Summers aver that under this section “due” means “overdue.” White and Summers, Uniform Commercial Code sec. 25 — 6, at 1053 (2d ed. 1980).

Herrin, Ltd.’s security agreement was dated April 12, 1982; at least some, if not a major portion, of Murphy’s note was overdue on January 1, 1982; it would therefore appear that Herrin, Ltd., had an absolute priority as to the tracts encompassed by its security agreement in crops planted from July 2 to July 12, 1982. We note that the parties have stipulated that Herrin, Ltd., has priority in the additional Men-denhall acres obtained in 1982 and not covered by PCA’s security agreement of March 1981.

That portion of the trial court’s order awarding Carr one-fourth of the 1982 crop is reversed without prejudice to whatever remedy may exist as between Murphy and Carr under their agreement; that portion of its order awarding PCA a lien upon the 1982 crop is modified to extend the lien to one-half the crop in priority over Carr together with its attorney fees; that portion of its order awarding Herrin, Ltd., a lien is vacated and the cause is remanded with directions to take an accounting to determine the time at which the crop became growing on the tracts described in Herrin, Ltd.’s security agreement of April 1982 and to determine how much of Murphy’s obligation was overdue to PCA on January 1, 1982. Herrin, Ltd., should then be awarded a lien superior to PCA in the crop planted between July 2 and July 12, 1982, on those tracts described in its agreement and to the extent that Murphy’s obligation was overdue on January 1, 1982, together with its superior lien upon the additional Mendanhall acres; the denial of Herrin, Ltd.’s attorney fees is affirmed; all in accordance with the views expressed in this opinion.

Affirmed in part, reversed in part and remanded with directions.

MILLS and TRAPP, JJ., concur.


author: JUSTICE LINN

text:
    ANNA MARIE DAVID et al., Plaintiffs-Appellants, v. JOHN RUSSO et al., Defendants-Appellees.
    First District (4th Division)
    No. 82—2495
    Opinion filed November 10, 1983.

      Leonard Rubin, of Chicago, for appellants.
    Richard J. Belmonte, of Chicago, for appellees.
   JUSTICE LINN

delivered the opinion of the court:

Plaintiffs, Anna Marie and Paula David, appeal from the decision of the circuit court of Cook County awarding defendants, John and Mary Russo, the sum of $22,542.63 as reimbursement for funds expended by the Russos while constructive trustees of a parcel of residential property in which plaintiffs held the beneficial interest. Plaintiffs raise the following issues on appeal: (1) whether the accounting ordered by the appellate court in an earlier, related case should include reimbursement for expenditures made after the time period reviewed in the prior appellate court decision; (2) whether defendants breached their duty as constructive trustees when they ignored a court order and made repairs to the property without prior authorization from the trial court; and (3) whether the trial court erred in computing the amount of reimbursement plaintiffs owed to defendants.

We affirm the decision of the trial court but reduce the amount awarded to defendants as reimbursement for their expenses.

Facts

This appeal is an outgrowth of earlier litigation between the same parties. The first action resulted in the creation of a constructive trust with defendants, John and Mary Russo, named as constructive trustees of a parcel of residential real estate for the benefit of Anna Marie and Paula David, orphaned minors. (David v. Russo (1980), 91 Ill. App. 3d 1023, 415 N.E.2d 531.) Facts from the earlier case necessary to an understanding of this appeal are summarized below.

Testimony in the earlier case established that the parents of the plaintiffs, unable to obtain financing to purchase a home in Mount Prospect, Illinois, reached an agreement with their friends the Russos whereby the Russos, acting as agents for the Davids, provided the $2,000 down payment, obtained the mortgage, and held legal title to the property as security while the Davids, owners of the beneficial title, paid all mortgage, tax, and special assessment payments on the house. The Davids’ monthly payments, each for an amount greater than the monthly sum owed to the mortgagee bank, were made directly to the Russos, who in turn deposited the payments in a savings account from which the bank automatically deducted the proper amount each month.

Nancy David, the girls’ mother, died in 1972; their father Edward died in 1977. Having no income, the David girls defaulted in their monthly payment to the Russos. The Russos then filed a forcible de-tainer action against them, claiming that the Davids had been nothing more than renters of the property for 10 years. In response the Davids sued for the imposition of a constructive trust on the ground that although the Russos held legal title to the property, the Davids held the equitable title and therefore were the true owners. During the pendency of these actions, the Davids were able to rent the property and thus make the necessary payments to the Russos until December 1978, when the tenants moved and no other tenants could be found.

The house was vacant for two months, December 1978 and January 1979. The Russos continued to make mortgage payments during those two months and then petitioned the trial court to grant them possession of the property. The petition, granted on February 6, 1979, also relieved the Davids from making any further payments to the Russos.

When the Russos went to inspect the property later in February, they discovered that extensive damage to the house had resulted both from frozen and burst water pipes in the bathroom and basement and from what appeared to be wanton destruction by vandals. On May 23, 1979, the trial court reached a decision in the constructive trust action, finding that a partnership existed between the Davids and the Russos and ordering that the property be sold and the proceeds divided between the parties. Both sides appealed from that judgment.

Believing that they had at least a 50% interest in the property, the Russos filed a further petition in the trial court, complaining about the condition of the property and requesting that the Davids be ordered to reimburse them for the mortgage payments made during the two months the house was vacant. On June 8, 1979, the trial court entered the following order:

“IT IS HEREBY ORDERED, ADJUDGED AND DECREED
A) that judgment is entered for the Defendants John and Mary Russo, and against the plaintiffs in the amount of $650. Execution is stayed until a final determination by the appellate courts and a final accounting.
B) that the Defendants John and Mary Russo,
1. will make all mortgages, taxes, assessments, insurance and other legitimate expenses on the said property,
2. May occupy the said property,
3. May arrange to make necessary repairs for normal habitation upon presentation of a petition with proper notice,
4. May have necessary plumbing repairs done immediately.
C) The court will [make] a determination of the fair rental value of the said property.
D) The court will balance the equities in a final accounting.
E) The Defendants need not pay any money on the rental value but this will be determined at the final accounting.”

In February 1980, the Russos hired Rass Bosswell, a handyman, to live in the house and to repair or replace the damaged walls, doors, floors, windows, exterior siding, electrical wiring, plumbing, appliances, and other fixtures. Bosswell testified that although the repairs themselves took approximately 160 hours, he needed six months to complete the job because his full time employment allowed him to work on the house only during his free time. Boswell lived in the house rent free until March 1982.

Meanwhile, on December 18, 1980, the appellate court reversed the trial court and imposed a constructive trust on the Russos, finding the Davids to be sole owners of the property and the Russos to be holding the legal title only as security for the loan for the down payment. The Russos filed an appeal in the Illinois Supreme Court, continued to make the mortgage payments, and kept Bosswell in possession of the property. On May 13, 1981, the supreme court declined to hear the appeal, and the appellate court opinion imposing the constructive trust and remanding the case to the trial court for an accounting was made effective. As of that date, the Russos ceased making mortgage payments; however, upon the institution of foreclosure proceedings against them, they paid all arrearages and costs to have the foreclosure suit dismissed.

On June 5, 1981, the Davids petitioned to set a hearing date for the accounting, but several delays ensued, and the hearing did not begin until May 7, 1982. Five additional hearing dates were necessary, and the accounting was not completed until September 15,1982.

At the hearing on the accounting, the Russos presented an itemized list of 41 expenditures totaling $38,433, all of which they claimed directly benefited the property and for which they requested reimbursement. Various witnesses then established the state of disrepair of the house when the Russos took possession in February 1979 and testified concerning bills for materials, labor, utilities, and landscape ing, assessments for the new sewer, and payments to forestall foreclosure on the mortgage, all of which had been paid by the Russos in addition to the monthly mortgage deduction from their savings account. At the conclusion of the testimony, the trial judge allowed 31 of the claimed expenses and entered an order allowing $22,542.63 as reimbursement due to the Russos from the Davids. The Davids appealed.

Opinion

I

The first issue raised by plaintiffs on appeal concerns the authority of the trial court in a remand for an accounting to award reimbursement for expenditures made by defendants beyond the period reviewed by the appellate court. Plaintiffs argue that the computation should be made for only that time period subject to review by the appellate court, i.e., from August 1967 to May 1979, because the “Appellate Court could not have contemplated a prospective effect of its mandate, and at the time it was rendered a prospective mandate was not needed.” Plaintiffs cite Spring Lake Drainage & Levee District v. Stead (1914), 263 Ill. 247, 104 N.E. 1014, and Fisher v. Burks (1918), 285 Ill. 290, 120 N.E. 768, as authority for the proposition that when a case is remanded with directions, the trial court is bound by those directions and may not take any action except as directed. Consequently, plaintiffs argue, the trial court at the accounting hearing was prevented from looking into any expenditures made by the Russos after May, 1979. We disagree.

As stated by the supreme court in Fisher, “Where the direction contained in [the mandate from the supreme court] is precise and unambiguous, it is the duty of the trial court to carry it into execution and not to look elsewhere for authority to change its meaning or direction.” (285 Ill. 290, 293, 120 N.E. 768, 769.) In both Spring Lake and Fisher, the supreme court's mandate ordered the trial court to enter a specific decree, in one case for a permanent injunction and in the other for a dismissal for want of equity. “There is no question that when a cause has been remanded with special directions it is out of the power of the court receiving such direction to open the case and take any action except as directed.” Spring Lake Drainage & Levee District v. Stead (1914), 263 Ill. 247, 251, 104 N.E. 1014, 1015-16.

However, “if specific directions are not given, the trial court is required to examine the appellate court’s opinion and determine therefrom what further proceedings would be proper and consistent with the opinion [citations] and, in this regard, it may allow the introduction of new evidence if consistent with the announced legal princi-pies [citations].” (Zokoych v. Spalding (1980), 84 Ill. App. 3d 661, 666, 405 N.E.2d 1220, 1225.) In the present case, the appellate court’s direction that the cause be remanded “for a determination of the amount of money owed defendants from plaintiffs” (David v. Russo (1980), 91 Ill. App. 3d 1023, 1030, 415 N.E.2d 531, 538) is clearly general in nature. As constructive trustees, defendants owed plaintiffs a duty to deal prudently with the property during the pendency of the trust. (In re Will of Hartzell (1963), 43 Ill. App. 2d 118, 192 N.E.2d 697.) Because defendants would have been held accountable for any waste of the property while they were in possession, we find that the trial court correctly took further evidence and allowed reimbursement for all documented expenses defendants incurred in repairing and preserving the property up to the time title and right to possession were reconveyed to plaintiffs.

II

Plaintiffs’ second contention on appeal is that the trial court erred in awarding defendants reimbursement for amounts spent to repair and maintain the property without the prior court authorization specified in the June 14, 1979, order quoted above. While we agree that certain sanctions should be available to punish noncompliance with court orders, we do not believe their imposition to be appropriate in the instant case.

At the time the repairs were being made, plaintiffs, who had moved only a short distance away, made no attempt to assert their right to demand prior court approval before any expenditures were made by defendants. Even if we believe that by ignoring the court's order the defendants breached their fiduciary .duty as constructive trustees of the property, the plaintiffs, as beneficiaries, acquiesced in the breach by accepting the benefits defendants conferred on the property and thereby relieved defendants from liability for such breach. In re Will of Hartzell (1963), 43 Ill. App. 2d 118, 134, 192 N.E.2d 697, 706.

“Where a trustee has incurred expenses which the court can clearly and satisfactorily see were necessary, he will be allowed them in the same manner as if leave had been granted on petitions before incurring them.” (Warner v. Rogers (1929), 255 Ill. App. 78, 88.) We therefore find no error in the trial court’s allowing reimbursement for expenditures made by defendants without prior court approval.

III

The final question raised on appeal is whether the trial court erred in computing the amount of reimbursement plaintiffs owed to defendants. At the hearing, plaintiffs challenged several of the expenditures made by defendants because (1) the expenses failed to benefit the property directly, (2) plaintiffs had furnished the funds in question, or (3) a court order had relieved plaintiffs of the responsibility for making certain payments.

The able trial judge allowed defendants all documented expenses for labor and materials used in the repair and maintenance of the property as well as all utility bills on the ground that heat, light and water were necessary to preserve and protect the premises from further damage from either weather or vandals. Also allowed were all special assessment payments made by defendants because plaintiffs were unable to produce convincing proof that they had furnished the funds for such payments. Finally, all mortgage payments were credited to defendants because they had been made on behalf of plaintiffs. We therefore find no error in the judge’s computation of the amount owed by plaintiffs to defendants for expenditures made during the period of the constructive trust, for “expenses incident to the preservation of a trust or for the benefit thereof are properly chargeable against and reimbursable from the trust estate.” Brown v. Commercial National Bank (1968), 94 Ill. App. 2d 273, 280, 237 N.E.2d 567, 571, affirmed (1969), 42 Ill. 2d 365, 247 N.E.2d 894, cert, denied (1969), 396 U.S. 961, 24 L. Ed. 2d 425, 90 S. Ct. 436; Warner v. Rogers (1929), 255 Ill. App. 78.

We do find error, however, in the failure of the trial judge to compute the amount owed by defendants to plaintiffs and to reduce by that amount the total due to defendants. The June 14, 1979, order imposing upon defendants the duty to make all mortgage payments and granting them possession of the property and the right to make repairs also directed the trial court, at the time of the accounting, to make a determination of the fair rental value of the property, to balance the equities in a final accounting, and to assess the fair rental value of the property against defendants, although they were to pay no rental value until the accounting. We find the trial judge erred in failing to assign to plaintiffs the credit for rental value due from defendants.

The purpose of a constructive trust, in addition to preventing unjust enrichment (Hofert v. Latorri (1961), 22 Ill. 2d 126, 174 N.E.2d 866), is to make available against the involuntary trustee all the conventional remedies available against a conventional fiduciary for breach of duty. (Nelson Development Co. v. Ohio Oil Co. (1942), 45 F. Supp. 933.) “The trustee’s duty to serve the interests of the beneficiary with complete loyalty, excluding all self-interest, prohibits him from dealing with the trust property for his individual benefit.” (Home Federal Savings & Loan Association v. Zarkin (1982), 89 Ill. 2d 232, 239, 432 N.E.2d 841, 846.) As trustees, defendants had a duty in managing the property to “exercise the judgment and care under the circumstances then prevailing, which men of prudence, discretion and intelligence exercise in the management of their own affairs ***.” (In re Will of Hartzell (1963), 43 Ill. App. 2d 118, 141, 192 N.E.2d 697, 709.) While a trustee acting in good faith will be held accountable only for what he has actually received, the basis of accounting where the trustee has been guilty of misconduct is the proceeds or profits which the trustee might have received from the property by the exercise of reasonable care and prudence. (Van Buskirk v. Van Buskirk (1893), 148 Ill. 9, 26, 35 N.E. 383, 387.) In view of the foregoing, we find that defendants owe plaintiffs the reasonable value of the use and occupation of the property for the time they had possession, for “[i]t is only equitable that there should be compensation in proportion to benefits.” (Breit v. Yeaton (1881), 101 Ill. 242, 273.) In the present case, the profit which might have been received is the same as the fair market rental value of the property.

The only evidence of the rental value of the property in question was given by a local real estate agent, who testified that similar houses in the area, if in prime condition, would rent for $600 per month. Although this figure was not controverted, the trial judge correctly took into consideration the state of disrepair of the house and did not accept $600 as the fair rental value of the property in question.

A court acting in equity should enter a decree adjudicating all matters in controversy so as to avoid multiple litigation and to do full and complete justice. (Midway Tobacco Co. v. Mahin (1976), 42 Ill. App. 3d 797, 356 N.E.2d 909.) Further, Supreme Court Rule 366(a)(5) (73 Ill. 2d R. 366(a)(5)) affirms the power of the reviewing court to render any judgment and make any order that the case may require. Consequently, this court finds that, based on the record presented, a reasonable and fair rental value of the property was the monthly amount that defendants were charging plaintiffs on the mortgage, $295. Rass Bosswell testified that he needed 160 hours, the equivalent of one month’s steady work, to restore the house to habitable condition. Defendants retained possession of the house for 36 months. After deducting the month needed for necessary repairs, we find that defendants owe plaintiffs $10,329 as the fair rental value of the house for 35 months. When the credits due each party are balanced against each other, the net amount owed to defendants by plaintiffs is $12,213.63.

Judgment affirmed; award reduced.

ROMITI, P.J., and JOHNSON, J., concur.


author: JUSTICE GOLDBERG

text:
    THE VILLAGE OF SKOKIE, Plaintiff-Appellant, v. WALTON ON DEMPSTER, INC., Defendant-Appellee.
    First District (1st Division)
    No. 83—0111
    Opinion filed November 7, 1983.

      Harvey Schwartz, Corporation Counsel, of Skokie (Jeffrey D. Greenspan, Assistant Corporation Counsel, of counsel), for appellant.
    McCarthy, Duffy, Neidhart and Snakard, of Chicago (John M. Duffy and Richard J. Witry, of counsel), for appellee.
   JUSTICE GOLDBERG

delivered the opinion of the court:

The village of Skokie (plaintiff) brought this action against Walton on Dempster, Inc. (defendant), seeking injunctive relief for removal of a sign which allegedly does not conform to the sign ordinance promulgated by plaintiff. Defendant counterclaimed for declaratory judgment. The trial court held the ordinance was unconstitutional as applied to defendant. Plaintiff appeals.

Plaintiffs sign regulations, which were promulgated in 1973, limit the height of a pole sign such as plaintiff’s to 24 feet. (Village Code of Skokie, Illinois (1980), art. 31.15.) In addition the ordinance limits the gross surface area to 200 square feet per face. (Village Code of Sko-kie, Illinois (1980), art. 31.161 — 5.) Finally, the regulations provide a schedule by which nonconforming signs shall be amortized, and eventually removed under a grace period of two to seven years varying with the original cost of the sign. Village Code of Skokie, Illinois (1980), art. 31.373-7.

Defendant operates an automobile dealership in Skokie. The subject sign was erected on steel poles in 1960. The sign is 46 feet 10 inches in height and 18 feet in width. The ordinance permits a height no more than 24 feet. The total gross surface area of the sign is 426 square feet. The ordinance permits an area not more than 200 square feet. Although the original cost of the sign was never established, the current cost of replacement with an identical sign would be $35,000. There is also evidence that the sign could be modified to substantial compliance with the ordinance for approximately $3,000. The cost of the sign has been completely amortized for tax purposes. Defendant was granted the maximum time of seven years to replace the sign as provided by the ordinance. As of the date of trial, defendant’s sign was the only nonconforming sign in plaintiff village.

John Sagat, defendant’s manager, testified the sign was an integral element of the company’s advertising. The sign is directly in front of defendant’s building. The sign has become in effect the corporate trade mark. Any alteration of the sign “could have adverse effect on our business.” In addition the witness received an estimate of $29,500 for construction of a replacement sign in conformance with the ordinance. That cost would represent a hardship to defendant. On three or four occasions defendant requested that the board of plaintiff village grant relief from the ordinance. However, each request was denied by plaintiff.

Rolf Campbell, a city planning and zoning consultant, testified the sign is “fully compatible” with the surrounding area. In his opinion, the sign was not “in any way adverse or detrimental to the general public health, safety, welfare, aesthetics or from any safety standpoint.”

Real estate appraiser William A. McCann testified in agreement with Mr. Campbell. In the opinion of the witness the sign in question is not a detriment to surrounding property values or to the health, welfare, safety or aesthetic sense of the community. In addition, the witness testified that defendant’s “is a unique location. This sign has to overcome visual obstructions that [do] not pertain to other locations.” Therefore, the witness concluded that the existence of the sign “in no way impairs the use of other property within the vicinity, nor does it impair the value or quiet use and enjoyment.”

On rebuttal, plaintiff’s director of planning, Robert Molumby, testified the removal of the sign would not have any harmful effect on the surrounding community. The witness stated the consideration of aesthetics is an important consideration in the determination of the public welfare of a community. The witness believed permitting defendant to retain its sign intact would result in a detriment to the general enforcement of the ordinance and would grant defendant an unfair competitive advantage against other car dealerships in the village, which have complied with the ordinance.

Defendant directs our attention to the Skokie zoning ordinance which provides in pertinent parts (see Village Code of Skokie, Illinois (1980), arts. 9.2.6, 9.3.6, 9.4.6, 9.5.5, 9.6.6, 9.7.8):

“The erection, construction, alteration and location of signs, other advertising structures, marquees and awnings shall be in conformity with the provisions of an ordinance known as the Sign Regulation Ordinance heretofore adopted by the Village of Skokie and as amended from time to time.”

Defendant argues that this provision in effect incorporated the sign regulations into the zoning ordinance. Thus, the standards used to grant a zoning variance should be applied to the case at bar. (See Village Code of Skokie, Illinois (1980), art. 12.2.12; LaSalle National Bank v. County of Cook (1957), 12 Ill. 2d 40, 145 N.E.2d 65.) In our opinion such a standard of review is neither required nor appropriate in the case at bar.

Although sign regulations and zoning restrictions may affect some similar interests and involve “many of the same questions,” (see City of Champaign v. Kroger Co. (1980), 88 Ill. App. 3d 498, 504, 410 N.E.2d 661, appeal denied (1981), 82 Ill. 2d 583), these restrictions are distinct in their scope and application. A zoning change generally affects the basic ability of a business to operate at a specified location. A sign regulation, on the other hand, merely restricts a method of advertising. In addition, zoning regulations, by their very nature, vary in their operation according to location. The instant sign regulation is intended to apply uniformly to all citizens and all parts of plaintiff village. It may well be stated that defendant did not regard the zoning ordinance as applicable here. Defendant never sought relief from the zoning board of appeals. Instead, defendant directly attacked the constitutionality of the ordinance in the circuit court.

In Metromedia, Inc. v. City of Des Plaines (1975), 26 Ill. App. 3d 942, 326 N.E.2d 59, we dealt with the validity of a sign ordinance. We emphasized the difference between a zoning ordinance and a sign regulation:

“As in the above case, the present issue concerns the constitutionality of a comprehensive provision enacted under the police power of the municipality. It is unlike a zoning law, the peculiar nature of which often warrants a determination of validity as applied to a particular piece of property. The provision in the present case is general in its terms, proscribing all off-premises advertising throughout the city’s territorial limits. Hence the ordinance is either valid to all it embraces or invalid to all it embraces.” 26 Ill. App. 3d 942, 944.

Defendant relies strongly upon City of Champaign v. Kroger Co. (1980), 88 Ill. App. 3d 498. There, the court dealt with the validity of an “Interim Sign Ordinance” applicable to store signs (88 Ill. App. 3d 498, 499). The court listed the six zoning factors outlined in La Salle National Bank v. County of Cook (1957), 12 Ill. 2d 40, 46-47, but determined that the application of those criteria was “inconclusive rather than persuasive.” (City of Champaign v. Kroger Co. (1980), 88 Ill. App. 3d 498, 503.) Actually the court in City of Champaign determined the validity of the ordinance at issue based on “how reasonably” the ordinance was related to “public health, safety, and welfare.” (88 Ill. App. 3d 498, 504.) The court concluded that the sign ordinance was reasonably related to the legitimate governmental interest in community aesthetics, and upheld the ordinance. (88 Ill. App. 3d 498, 510.) In addition, this court recently adjudicated and upheld the validity of another municipal sign regulation without applying zoning standards. See Krych v. Village of Burr Ridge (1982), 111 Ill. App. 3d 461, 444 N.E.2d 229, appeal denied (1983), 94 Ill. 2d 553, and cases there cited.

In Krych the court went beyond the separation betwéen zoning requirements and sign regulation. The court applied simply the test of reason to the validity of a sign regulation. These regulations were held “valid as long as they are reasonable.” (Krych v. Village of Burr Ridge (1982), 111 Ill. App. 3d 461, 465.) Krych and Metromedia make clear and definite the complete difference between a regulatory sign ordinance and the traditional zoning ordinance.

Thus, we do not believe the determination of whether the instant sign regulations were incorporated into plaintiff’s zoning ordinance is critical to our adjudication of the present controversy. In City of Belleville v. Kesler (1981), 101 Ill. App. 3d 710, 428 N.E.2d 617, we dealt with various sign restrictions specifically based upon and varying in accordance with different zoning classifications. (See 101 Ill. App. 3d 710, 712.) In reversing the decision of the trial court we held:

“Further, it has been established that the role of aesthetics in zoning is an element of the public health, safety and welfare. [Citation.] Thus, a sign ordinance validly may regulate the size and location of a sign on the basis of enhancing the appearance of the community as well as protecting the public from injury due to the potentially hazardous location of a sign; consequently *** plaintiff’s sign code is not an unconstitutional enactment on the grounds that it was not related to public welfare.” 101 Ill. App. 3d 710, 714.

In the case at bar we find the Skokie sign ordinance to be reasonable. We have found no reason to accept disparate enforcement of the restriction to defendant as compared to any other citizen of plaintiff municipality. See Krych v. Village of Burr Ridge (1982), 111 Ill. App. 3d 461; City of Belleville v. Kesler (1981), 101 Ill. App. 3d 710; City of Champaign v. Kroger Co. (1980), 88 Ill. App. 3d 498.

Next, defendant argues the amortization schedule embodied in the subject ordinance is invalid because it is inflexible in its application. Defendant relies upon Village of Oak Park v. Gordon (1965), 32 Ill. 2d 295, 205 N.E.2d 464. There, the zoning ordinance permitted the property owner to amortize the loss of the beneficial use of his property over a specified period of time to terminate the nonconforming use. (32 Ill. 2d 295, 296.) The property was a rooming house and the ordinance would require reduction of the tenancy from four to two persons. The court concluded that the presumption of validity as to the reasonableness of the amortization schedule was overcome by the fact that the property owner had the right under zoning principles to continue an established nonconforming use in view of the absence of any contrary reason.

We find the amortization schedule embodied in plaintiff’s sign ordinance to be reasonable both on its face and as applied to defendant. In Village of Gurnee v. Miller (1966), 69 Ill. App. 2d 248, 215 N.E.2d 829, appeal denied (1966), 34 Ill. 2d 629, we upheld the validity of an amortization period of 36 months for discontinuance of a nonconforming use of property.

Amortization periods similar to the provisions here at issue have been upheld in other jurisdictions. For example in Modjeska Sign Studios, Inc. v. Berle (1977), 43 N.Y.2d 468, 402 N.Y.S.2d 359, 373 N.E.2d 255, appeal dismissed (1978), 439 U.S. 809, 58 L. Ed. 2d 101, 99 S. Ct. 66, the New York Court of Appeals upheld an ordinance which required the removal of all billboards within seven years. In Metromedia, Inc. v. City of San Diego (1980), 26 Cal. 3d 848, 610 P.2d 407, 164 Cal. Rptr. 510, rev’d on other grounds (1981), 453 U.S. 490, 69 L. Ed. 2d 800, 101 S. Ct. 2882, the California Supreme Court upheld an amortization schedule which required removal of billboards within one to four years based on the adjusted market value of the sign. (See 26 Cal. 3d 848, 881, 610 P.2d 407, 426, 164 Cal. Rptr. 510, 529.) The court stated “that a one-year amortization period was unreasonable except as to signs which had been fully depreciated for federal income tax purposes.” 26 Cal. 3d 848, 883, 610 P.2d 407, 427, 164 Cal. Rptr. 510, 530.

In the case at bar, plaintiff’s regulation extends the amortization period based on the value of the individual signs. Such a provision lessens the economic impact of the regulations on individual businesses and makes the application of the regulations more reasonable. Furthermore defendant was granted a full seven years to amortize the cost of its sign, and the sign was completely depreciated for Federal income tax purposes. At this point, virtually 10 years have elapsed since adoption of the ordinance in question. We simply do not see how defendant is in any different position than any other business in Skokie which has absorbed economic loss in complying with Sko-kie’s sign ordinance.

In the instant case the burden of proof rests strongly upon defendant. The plaintiff has full legal right to regulate signs such as that maintained by the defendant. (Ill. Rev. Stat. 1981, ch. 24, par. 11 — 80—15.) Consequently the ordinance is presumptively valid as a constitutional exercise of plaintiff’s authority. See City of Champaign v. Kroger Co. (1980), 88 Ill. App. 3d 498, 503.

The opinion evidence offered by defendant’s experts falls far short of sustaining defendant’s burden. The city planner and zoning consultant who testified for defendant conceded that he had assisted in preparation of the Cook County sign ordinance. This enactment requires conformity by a violating owner within 10 days after his receipt of notice from the county. The county ordinance is thus far more restrictive than the ordinance before us under which defendant had a grace period of seven years within which to comply.

We conclude that the defendant has failed to overcome the presumption of validity upon which the ordinance rests. Defendant has not established that its economic hardship outweighs the aesthetic interests and requirements of the community as enunciated by its elected representatives. In our opinion, this record presents simply a reasonable aesthetic requirement well within the legal authority of the plaintiff village as evidenced by the pertinent cases (e.g., City of Belleville v. Kesler (1981), 101 Ill. App. 3d 710).

For these reasons the judgment appealed from is reversed and the cause is remanded with directions for the entry of a declaratory judgment requiring defendant to comply with the ordinance requirements within a reasonable time.

Reversed and remanded with directions.

BUCKLEY, P.J., and McGLOON, J., concur.