author: JUSTICE REINHARD

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. JOHN R. SPARGO, Defendant-Appellant.
    Second District
    No. 80-922
    Opinion filed January 19, 1982.
    Rehearing denied February 17, 1982.

      James A. Campion, of Holmstrom and Green, of Woodstock, for appellant. •
    Theodore J. Floro, State’s Attorney, of Woodstock (Phyllis J. Perko. and Cynthia N. Schneider, both of State’s Attorneys Appellate Service Commission, of counsel), for the People.
   JUSTICE REINHARD

delivered the opinion of the court:

Defendant, John R. Spargo, appeals from his conviction for the offense of child pornography (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a) and contends: (1) that section 11—20a of the Criminal Code of 1961 is unconstitutionally overbroad and (2) that section 11—20a is unconstitutionally vague and violates Federal and State due process requirements.

On August 30, 1979, defendant was charged by information with violation of section 11—20a(b)(l)(A) of the Criminal Code of 1961 (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(b)(l)(A)). The information alleged that on August 17, 1979, defendant exhibited certain child pornography to Edward J. Flynn. Subsequently, defendant filed a motion to dismiss the information alleging that the child pornography statute was unconstitutional in various respects. In a memorandum opinion, the trial judge denied defendant’s motion, and the case proceeded to a bench trial.

The only evidence introduced at trial was a stipulation of facts and the State’s exhibit containing the alleged child pornography. The factual stipulation was as follows:

“1. That Edward J. Flynn, (hereinafter referred to as ‘Flynn’), an adult male, was, during the years of 1978 and 1979, a senior investigator for the Illinois Legislative Investigation Commission.
2. That John R. Spargo, (hereinafter referred to as ‘Spargo’), an adult male, was, at all times relevant hereto, a resident of Lake Geneva, Wisconsin.
3. That Spargo was unaware that Flynn was a law enforcement officer, and Flynn never informed Spargo of the fact until after Spargo’s arrest.
4. That at the request of Flynn, Spargo and Flynn met at the McHenry Dam State Park in McHenry County, Illinois, on Friday, August 17,1979.
5. That at the request of Flynn, Spargo brought with him to that meeting People’s Exhibit #1.
6. That at the request of Flynn, and while both parties were sitting in Flynn’s automobile, Spargo showed and/or exhibited to Flynn, and the parties mutually viewed, People’s Exhibit #1 and its contents.
7. That thereupon, Flynn placed Spargo under arrest.
8. That Spargo did not sell or deliver nor did he offer to sell or deliver People’s Exhibit #1 or any of the contents thereof, to Flynn.”

People’s exhibit No. 1 is an album consisting of 70 3" x 4" color photographs of young, nude boys engaged in acts of masturbation and exhibition of their genitals and pubic area. There are multiple photographs of the same boy on a page with his name, age and brief comments about the child’s sexual traits. The ages listed for the boys range from 11 to 16. The court found the defendant guilty of the offense of child pornography and set a date for a sentencing hearing. On October 29, 1980, defendant was sentenced to a term of 24 months’ probation and fined $1,000.

Defendant contends that section 11—20a of the Criminal Code of 1961 is unconstitutionally overbroad in that it makes criminal the conduct involved herein, i.e., the showing of obscene photographs to another within the privacy of that person’s automobile. It should be noted initially that defendant is correct in his initial premise that the statute does appear to prohibit this kind of conduct. The statute makes anyone who “exhibits” child pornography guilty of a Class 4 felony. (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(b)(l)(A).) The statute does not purport to regulate only the commercial exhibition of child pornography, as evidenced by the lack of a qualifier for the word “exhibits.” Further evidence of this is found in the combined reading of sections 11—20 and 11—20a. Section 11—20 of the Criminal Code of 1961, which pertains to the offense of obscenity, provides that it is an affirmative defense to the offense of obscenity if the dissemination “[w]as not for gain and was made to personal associates * * (Ill. Rev. Stat. 1979, ch. 38, par. 11—20(f)(1).) However, the child pornography statute contains no such affirmative defense, thereby clearly manifesting the legislative intent to prohibit even the private exhibition or dissemination of such material.

Section 11—20a provides in its pertinent parts:

“(b) Offense. (1) Any person, who with knowledge of the nature or content thereof, or recklessly failing to exercise reasonable inspection which would have disclosed such nature or content, commits a Class 4 felony to which a fine of up to $25,000 may be added when he or she:
(A) Sells, delivers, exhibits or otherwise makes available, or offers or agrees to sell, deliver, or otherwise make available, any child pornography; * *
(Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(b)(l)(A).)

Defendant cites the United States Supreme Court decision in Stanley v. Georgia (1969), 394 U.S. 557, 22 L. Ed. 2d 542, 89 S. Ct. 1243, as support for his proposition that the State cannot constitutionally prohibit the private noncommercial dissemination or exhibition of child pornography.

In Stanley, pursuant to a warrant, Federal and State agents, while searching defendant’s home for evidence of alleged bookmaking activity, discovered three reels of eight-millimeter film. Defendant was subsequently indicted and convicted for knowingly having possession of obscene matter. The Supreme Court reversed the conviction while holding that the first and fourteenth amendments prohibit making mere private possession of obscene matter a crime. In so holding, Justice Marshall for the majority stated:

“It is now well established that the Constitution protects the right to receive information and ideas. ‘This freedom [of speech and press]0 ° ° necessarily protects the right to receive 0 ° °.’ Martin v. City of Struthers, 319 U.S. 141, 143, [87 L. Ed. 1313, 1316-17, 63 S. Ct. 862] (1943); [citations]. This right to receive information and ideas, regardless of their social worth, see Winters v. New York, 333 U.S. 507, 510, [92 L. Ed. 840, 847, 68 S. Ct. 665] (1948), is fundamental to our free society.” 394 U.S. 557, 564, 22 L. Ed. 2d 542, 549, 89 S. Ct. 1243, 1247.

Defendant relies on this “right to receive” obscene matter as support for his contention that noncommercial exhibition of obscene matter cannot be constitutionally prohibited. However, subsequent decisions of the Supreme Court have interpreted Stanley in a more restrictive fashion.

In United States v. Reidel (1971), 402 U.S. 351, 28 L. Ed. 2d 813, 91 S. Ct. 1410, the defendant has been indicted for having mailed a single copy of a booklet assumed to be obscene in violation of section 1461 of title 18 of the U.S. Code. The court held that whatever the scope of the “right to receive” referred to in Stanley, it was not so broad as to immunize dealings in obscenity. The court further stated that the focus of the Stanley decision “was on freedom of mind and thought and on the privacy of one’s home.” 402 U.S. 351, 356, 28 L. Ed. 2d 813, 817, 91 S. Ct. 1410, 1412.

Later Supreme Court cases are consistent in their interpretation of Stanley as protective only of the right to possess obscene material in one’s own home. For example, in United States v. Orito (1973), 413 U.S. 139, 37 L. Ed. 2d 513, 93 S. Ct. 2674, Chief Justice Burger for the majority stated:

“The essence of appellee’s contentions is that Stanley has firmly established the right to possess obscene material in the privacy of the home and that this creates a correlative right to receive it, transport it, or distribute it. We have rejected that reasoning. This case was decided by the District Court before our decisions in United States v. Thirty-seven Photographs, 402 U.S. 363, [28 L. Ed. 2d 822, 91S. Ct. 1400,] (1971), and United States v. Reidel, 402 U.S. 351, [28 L. Ed. 2d 813, 91 S. Ct. 1410] (1971). Those holdings negate the idea that some zone of constitutionally protected privacy follows such material when it is moved outside the home area protected by Stanley.” (413 U.S. 139, 141-42, 37 L. Ed. 2d 513, 517, 93 S. Ct. 2674, 2677. See also United States v. 12 200-Ft. Reels of Super 8 mm. Film (1973), 413 U.S. 123, 126, 37 L. Ed. 2d 500, 505, 93 S. Ct. 2665, 2668 (stating that Stanley depended, not on any first amendment right to purchase or possess obscene materials, but on the right of privacy in the home).)

Similarly, the Illinois Supreme Court has interpreted Reidel to limit Stanley to “factual situations which do not involve actions outside the home.” (People v. Garrison (1980), 82 Ill. 2d 444, 448, 412 N.E.2d 483.) Whatever constitutional protections Stanley confers were relinquished by the defendant when he removed the child pornography from the confines of his own home and exhibited it to another.

Defendant, however, contends that the prohibition of private, noncommercial exhibition of child pornography is not rationally related to the State’s goal of protecting children. That the State has a legitimate interest in protecting its children is a matter not open to dispute. (Ginsberg v. New York (1968), 390 U.S. 629, 640, 20 L. Ed. 2d 195, 204, 88 S. Ct. 1274, 1281.) The Supreme Court has frequently acted to protect the interests of children from sexual and other forms of exploitation. See, e.g., Prince v. Massachusetts (1944), 321 U.S. 158, 88 L. Ed. 645, 64 S. Ct. 438 (conviction affirmed for violation of child labor law by allowing nine-year-old girl to sell religious sect material on the street); Ginsberg v. New York (1968), 390 U.S. 629, 20 L. Ed. 2d 195, 88 S. Ct. 1274 (conviction affirmed under New York law prohibiting the selling of material which has a predominant appeal to prurient interests of minors).

Unlike other forms of obscenity legislation, the evil sought to be prevented by the child pornography statute is not any alleged “antisocial behavior” which may result from the viewing of such material. (See Roth v. United States (1957), 354 U.S. 476, 485-86,1 L. Ed. 2d 1498, 1507-08, 77 S. Ct. 1304, 1309-10.) Rather, the statute seeks to protect the real victims of child pornography—the children needed for its production. In this regard, we note that we need not decide herein whether private exhibition outside the home of forms of obscenity other than child pornography would be constitutional in light of the different interests involved.

Defendant argues, however, that if the State’s goal is to prevent children from becoming involved in child pornography, a prohibition on the private, noncommercial exhibition does not reasonably relate to that goal. However, we agree with the State that a ban on such exhibition will decrease the demand for such material, thus decreasing the need for solicitation of children for its production. Defendant, however, cites certain language in the Stanley decision for the proposition that a State cannot make criminal an otherwise noncriminal act for the purpose of diminishing the likelihood of future criminal activity. The court in Stanley stated:

“But more important, if the State is only concerned about printed or filmed materials inducing antisocial conduct, we believe that in the context of private consumption of ideas and information we should adhere to the view that ‘[a]mong free men, the deterrents ordinarily to be applied to prevent crime are education and punishment for violations of the law. . . .’ Whitney v. California, 27.4 U.S. 357, 378, [71 L. Ed. 1095, 1107, 47 S. Ct. 641] (1927), (Brandeis, J., concurring).” (394 U.S. 557, 566-67, 22 L. Ed. 2d 542, 550-51, 89 S. Ct. 1243, 1248-49.)

We do not read this language as establishing the rule that a State may never constitutionally proscribe actions which increase the demand for an illicit product. This is especially true in a case such as this where the production of the product can have such damaging consequences on the children involved. The States retain broad powers to regulate obscenity. (394 U.S. 557, 568, 22 L. Ed. 2d 542, 551, 89 S. Ct. 1243, 1250.) Under the terms of the Illinois child pornography statute, in order to be classified as child pornography, the material must necessarily be obscene. (See Miller v. California (1973), 413 U.S. 15, 37 L. Ed. 2d 419, 93 S. Ct. 2607.) The trial judge in this case found defendant’s photographs to be child pornography, and defendant does not contend otherwise on appeal. Considering the strong and compelling interest this State has in preventing children from becoming involved in the production of child pornography, we believe that a prohibition on private, noncommercial exhibition of child pornography is well within the broad constitutional powers of the State to regulate obscenity. Other States have enacted similar legislation prohibiting the exhibition of child pornography if obscene, thus also evincing a compelling State interest in regulating against the sexual exploitation of children. See, e.g., Fla. Stat. Ann. §847.014(2) (b) (1981); Ind. Code Ann. §35-30—10.1—2 (1979); Neb. Rev. Stat. §28-1463(2) (1979); N.H. Rev. Stat. Ann. §650:2 (1979); Or. Rev. Stat. §163.485 (1979).

We also reject defendant’s argument, however, because it assumes that the harm to be prevented by the statute stems only from the actual production of child pornography. We believe that children who have already been the subject of graphic sexual depiction in some form of child pornography have an interest in having such material shielded from the view of others. As damaging as the initial sexual exploitation involved when the photographs were taken is the continuing fear of exposure from distribution and the possible tension of keeping the act secret. Exhibition of the photographs in the case at bar, for example, could very well lead to further contact and exploitation of the child since the children’s names and sexual traits were contained in People’s Exhibit No. 1. The inability of children to give an informed consent to participation in child pornography justifies the statute’s prohibition against the material’s later exhibition. The Supreme Court has recognized the “peculiar vulnerability” of children while stating that “during the formative years of childhood and adolescence, minors often lack the experience, perspective, and judgment to recognize and avoid choices that could be detrimental to them.” (Bellotti v. Baird (1979), 443 U.S. 622, 634-35, 61 L. Ed. 2d 797, 807-08, 99 S. Ct. 3035, 3043-44.) Of course, child pornography may also be the result of physical abuse or blackmail which completely renders meaningless the child’s ability to consent. (See Guio, Burgess & Kelly, Child Victimization: Pornography and Prostitution, 3 J. Crime & Just. 65 (1980).) We therefore hold that whatever first amendment interest defendant has in the private, noncommercial exhibition of child pornography outside of his home is more than sufficiently outweighed by the State’s interest in preventing the solicitation of children for the production of child pornography and in preventing further harm to those children who have already been victimized by this practice.

Defendant next contends that section 11—20a is unconstitutionally vague in that it violates Federal and State due process standards in three respects. First, defendant asserts that the statute is unconstitutionally vague in that it fails to adequately inform how the trier of fact is to apply the standards defining obscenity set forth in the statute. Defendant’s argument proceeds as follows:

Section 11—20a of the Criminal Code provides that matter will be considered “child pornography” if:

“(A) it has as one of its participants or portrayed observers a child under the age of 16 or who appears as pre-pubescent; and
(B) it contains depictions or descriptions of sexual conduct which are patently offensive; and
(C) taken as a whole, the average person, applying contemporary standards of this State, would find it has as its dominant theme an appeal to prurient interest; and
(D) taken as a whole, it lacks serious literary, artistic, educational, political or scientific purpose or value.” (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(a)(l).)

However, the statute also provides that, in interpreting the evidence, “[c]hild pornography shall be judged with reference to ordinary adults, except that it shall be judged with reference to children or other specially susceptible audiences if it appears from the character of the material or the circumstances of its dissemination to be specially designed for or directed to such an audience.” (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(c).) Defendant asserts that once the court has determined that the material has been designed for a “specially susceptible audience” the statute makes it unclear whether the trier of fact must make the factual determinations listed in 11—20a(a) (1) with reference to the specially susceptible audience or whether the determinations are to be made with reference to “ordinary adults.” For example, if the court determines that the material is designed for the specially susceptible audience of pedophiles, must the court then determine that the material is “patently offensive” and “lacks serious literary, artistic, educational, political or scientific purpose or value” to the average pedophile, or must the court make those determinations with reference to the “ordinary adult”? Obviously, the former is a rather strained interpretation of the statute. However, this is not to sáy that the statute is well drafted. A purely mechanical reading of the statute would seem to indicate that the court should, in fact, make these factual determinations with reference to the “specially susceptible audience.” However, the Supreme Court’s decision in Mishkin v. New York (1966), 383 U.S. 502, 16 L. Ed. 2d 56, 86 S. Ct. 958, shows clearly that this is not the statute’s aim.

In Mishkin, defendant was found guilty of violating a New York obscenity statute by hiring others to prepare obscene books, publishing obscene books, and possessing obscene books with intent to sell them. In the Supreme Court, defendant contended that some of his books could not be considered obscene because they did not meet the “prurient interest” requirement of obscenity articulated in Roth v. United States (1957), 354 U.S. 476, 1 L. Ed. 2d 1498, 77 S. Ct. 1304. Defendant reasoned that those books which depicted deviate sexual practices, such as flagellation, fetishism, and lesbianism, did not satisfy the requirement because they did not appeal to the prurient interest of the “average person” in sex. Defendant argued that “instead of stimulating the erotic, they disgust and sicken.” (383 U.S. 502, 508, 16 L. Ed. 2d 56, 62, 86 S. Ct. 958, 963.) In rejecting this argument, the court stated:

“Where the material is designed for and primarily disseminated to a clearly defined deviant sexual group, rather than the public at large, the prurient-appeal requirement of the Roth test is satisfied if the dominant theme of the material taken as a whole appeals to the prurient interest in sex of the members of that group. The reference to the ‘average’ or ‘normal’ person in Roth, 354 U.S., at 489-490, [1 L. Ed. 2d at 1510,] does not foreclose this holding. In regard to the prurient-appeal requirement, the concept of the ‘average’ or ‘normal’ person was employed in Roth to serve the essentially negative purpose of expressing our rejection of that aspect of the Hicklin test, Regina v. Hicklin (1868), L.R. 3 Q.B. 360, that made the impact on the most susceptible person determinative. We adjust the prurient-appeal requirement to social realities by permitting the appeal of this type of material to be assessed in terms of the sexual interests of its intended and probable recipient group; and since our holding requires that the recipient group be defined with more specificity than in terms of sexually immature persons, it also avoids the inadequacy of the most-susceptible-person facet of the Hicklin test.” 383 U.S. 502, 508-09, 16 L. Ed. 2d 56, 62, 86 S. Ct. 958, 963-64.

It is apparent, therefore, that in including the “specially susceptible audiences” language in section 11—20a(c) the legislature intended to respond to the above-quoted holding in Mishkin. Hence, the only reasonable reading of the statute in light of the Mishkin case is that when considering the prurient appeal of alleged obscene material (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(a)(l)(C)), the trier of fact may consider its appeal to the specially susceptible audience to which the material seems directed. However, when considering the other factors which bear on the material’s obscenity, i.e., the material is patently offensive and lacks serious literary, artistic, educational, political or scientific purpose or value (Ill. Rev. Stat. 1979, ch. 38, par. 11—20a(a)(l)(B), (D)), the trier of fact is to use the “ordinary adult” standard. The prime consideration in construing a statutory enactment is to give effect to the intent of the legislature. (People v. Beam (1979), 74 Ill. 2d 240, 242, 384 N.E.2d 1315.) In ascertaining this intent, the entire statute must be considered, and also the evil to be remedied and the object to be attained. (People v. Bratcher (1976), 63 Ill. 2d 534, 543, 349 N.E.2d 31.) Thus, when the statute is construed in light of the Mishkin case, we hold that it gives sufficient notice of the kind of conduct that is proscribed and how the statutory standards are to be applied. Further, our review of the record discloses that the trial court appropriately applied these standards in determining that the material involved in this case was in fact child pornography.

Defendant’s next contention is that section 11—20a is unconstitutionally vague in its use of the term “exhibit.” Defendant contends that it is unclear whether the statute prohibits the private exhibition of child pornography or whether only commercial exhibition of such matter is forbidden. As noted previously, we believe that the legislative intent to prohibit both the private and commercial exhibition of child pornography is clear. When called upon to decide a vagueness question, a court will assume, absent contrary legislative intent, that the words of the statute have their ordinary and popularly understood meaning. (People v. Schwartz (1976), 64 Ill. 2d 275, 280, 356 N.E.2d 8; Farrand Coal Co. v. Halpin (1957), 10 Ill. 2d 507, 510, 140 N.E.2d 698.) Ordinary English usage of the word “exhibit” includes both notions of private and public display. Webster’s New Collegiate Dictionary defines exhibit as follows:

“vt 1: to present to view: as a: to show or display outwardly esp. by visible signs or actions « tf «
c: to show publicly esp. for purposes of competition or demonstration”
(Webster’s New Collegiate Dictionary 401 (1977).)

Accordingly, since the commonly understood meaning of the word “exhibit” implies both public and private displays, the statute is not vague and defendant was properly prosecuted thereunder.

Defendant’s final contention is that section 11—20a is unconstitutionally vague in its definition of child pornography. Defendant relies on the dissent in Paris Adult Theatre I v. Slaton (1973), 413 U.S. 49,37 L. Ed. 2d 446, 93 S. Ct. 2628, in which Justice Brennan expressed the view that none of the Supreme Court’s previous definitions of obscenity reduced vagueness “to a tolerable level” and that the Supreme Court was “manifestly unable to describe it in advance except by reference to concepts so elusive that they fail to distinguish clearly between protected and unprotected speech.” (413 U.S. 49, 84, 37 L. Ed. 2d 446, 473, 93 S. Ct. 2628, 2647-48 (Brennan, J., dissenting).) However, the definition of child pornography contained in section 11—20a incorporates those essential elements of obscenity articulated by the Supreme Court in Miller v. California (1973), 413 U.S. 15, 37 L. Ed. 2d 419, 93 S. Ct. 2607. In Miller, the court articulated its latest definition of obscenity in the following manner:

“The basic guidelines for the trier of fact must be: (a) whether ‘the average person, applying contemporary community standards’ would find that the work, taken as a whole, appeals to the prurient interest, Kois v. Wisconsin, supra, at 230, [33 L. Ed. 2d 312,] quoting Roth v. United States, supra, at 489, [1 L. Ed. 2d 1498]; (b) whether the work depicts or describes, in a patently offensive way, sexual conduct specifically defined by the applicable state law; and (c) whether the work, taken as a whole, lacks serious literary, artistic, political, or scientific value.” (413 U.S. 15, 24, 37 L. Ed. 2d 419, 431, 93 S. Ct. 2607, 2615.)

Since section 11—20a clearly incorporates these standards, defendant’s contention that the statute is unconstitutionally vague must be rejected. (See Ward v. Illinois (1977), 431 U.S. 767, 52 L. Ed. 2d 738, 97 S. Ct. 2085.) Justice Brennan’s dissenting view in Slaton, which was reiterated again in Miller, was, of course, not the majority opinion, and cannot be regarded as authoritative. People v. O’Neil (1974), 25 Ill. App. 3d 227, 230, 323 N.E.2d 7.

Accordingly, since we find no constitutional infirmity with the statute under which defendant was prosecuted, the judgment of the circuit court of McHenry County is affirmed.

Affirmed.

SEIDENFELD, P. J., and UNVERZAGT, J., concur.


source: Caselaw Access Project

author: PRESIDING JUSTICE SEIDENFELD

license: Public Domain

text:
    MARVIN JOHNSON et al., Plaintiffs-Appellants, v. WALTER TIPTON et al., Defendants-Appellees.
    Second District
    No. 80-775
    Modified opinion filed on denial of rehearing February 16, 1982.
    Bernard P. Reese, Jr., of Reese and Reese, of Rockford, for appellants.
    Eugene R. Pigatti and Robert G. Coplan, both of Rockford, for appellees.
   PRESIDING JUSTICE SEIDENFELD

delivered the opinion of the court:

The plaintiffs, members of a farm family, claim that they were injured in their health and property by heavy metal and phenol pollution resulting from storage of defendant Valspar Corporation’s manufacturing wastes on the adjoining farm occupied by the defendant, Walter Tipton. A jury returned a verdict in favor of both defendants, upon which the trial court entered judgment. Subsequently, the court denied post-trial motions for judgment n.o.v. or, in the alternative, for a new trial. Plaintiffs appeal, contending that the verdict is against the manifest weight of the evidence and that various trial errors necessitate a new trial. Additionally, plaintiffs contend that the court erred in dismissing two members of the family, Elizabeth Johnson Schoon and Rebecca Johnson Hampton, who sought to be added as parties plaintiff in the amended complaint.

The plaintiffs moved to their farm on Wempleton Road in Winnebago County in early 1954. They used a 36-foot well (“the shallow well”) for family purposes, including drinking, cooking, and bathing, without any problems until 1968, when they began noting an occasional off-taste and odor. They drank the water until May 16,1972, when they noticed a strong foul taste and switched to using a neighbor’s water. They drilled a deep well in March of 1974 and used water from it until September 1975 when they went back to hauling water. In March of 1976, plaintiffs moved from their farm.

The plaintiffs, after discovering the foul taste in 1972, made various attempts to obtain expert opinions as to any possible contamination of their water supply. In May of 1972, Gerald Kehoe of the EPA sampled water from the shallow well and found no abnormal concentrations of heavy metals. The EPA took samples in April of 1973 and at other times, and, according to Mrs. Johnson’s testimony at trial, generally told the Johnsons that their water was within legal standards for drinking water.

Craig Loudat of the Illinois Department of Public Health inspected the shallow well in April of 1973 and arranged for an analysis of a water sample from the well. The analysis indicated no traces of heavy metals, but did reveal the presence of bacteria and “extremely high” levels of nitrates. The Winnebago County Health Department’s analyses of wáter samples from the plaintiffs’ well, also conducted in 1973, indicated negligible odor and no traces of heavy metals.

Rudy Loher, then of the Erickson Chemical Company, tested water samples and investigated the premises sometime before February 1,1974. He noted the similarity of the odor of water from the shallow well and that of Tipton’s quarry. Loher’s subsequent analysis revealed 1.9 ppb of mercury in the water, above the 1973 discharge limits of .5 ppb. He advised the Johnsons not to drink the water from the shallow well. His analysis also revealed the presence of phthalate, a substance quite similar chemically to phenols. Loher also investigated the water in June of 1974, finding under .1 ppb of mercury and a low level of lead in the new well.

Dennis Johnson, then of the Illinois EPA, began investigations of the Johnson wells and property in July 1975, taking samples of water from both wells in September 1975. On his trip to the Johnson farm, Dennis Johnson observed the storage of wastes in both the quarry and hedgerow on the Tipton farm. He noticed that water from the shallow well had a distinct odor and “residual taste.” He was also able to identify solidified resins in soil that he dug up from the hedgerow area.

Johnson broke off a piece of resin and had a laboratory analyze its chemical content. The sample was found to contain 290 ppb of phenol, which Johnson testified to as “hazardous” and toxic, and 290 times the 1972 Federal recommended standard of one ppb. Samples from the wells showed phenol concentrations of 6 ppb in the deep well and 7 ppb in the shallow well. The samples also showed mercury levels of 0.2 ppb in the shallow well and 0.0 ppb in the deep well.

Johnson testified that, in his opinion, “phenols, depending on their molecular structure, can be either one hundred percent soluble in water or limited to a fifty percent solubility” and that “fifty percent of a phenolic family of phenolic chemicals would be soluble in water.” Valspar offered testimony by Frederick Heiss, who was in charge of Valspar’s paint lab in the early seventies that its phenols were not water-soluble.

James Daugherty of the Illinois EPA analyzed four samples collected from barrels on the Tipton premises on December 10, 1975. The tests showed a phenol concentration of as much as 80,000 ppm.

Plaintiffs ascribe a large number of ailments to themselves and their farm animals to water from the shallow and deep wells. The plaintiffs’ hogs developed breeding problems and birth defects beginning in 1968; the plaintiffs’ cow occasionally gave milk with an off-taste before 1969 and was sold in 1970 because of failure to breed; in 1969 her six-month old calf convulsed and died. Chickens and family pets, including a canary, a gerbil, and two parakeets also developed a variety of physical ailments in the early 1970’s.

Violet Johnson developed several ailments, beginning in 1967 with an allergy that caused swelling in her lip and loss of her voice. She began feeling tired and experiencing chills and stomach pains shortly thereafter up through 1974, and had one tumor or “polyp” removed between 1971 and 1972 and another removed in 1977. Her condition appears to have improved after 18 chelation treatments by physician John Olwin between November of 1978 and April of 1980.

Marvin Johnson started noticing problems with his health in 1969 with tiredness, headaches, trembling in his hands and had difficulty sleeping. He developed chest pains in 1973. A lump in his urine passage was removed in 1979.

Fred Johnson developed an allergy in 1967, along with a rash, stomach pains, and tiredness.

Donald Johnson’s problems began in January 1970 with pains in the heels, difficulty walking, headaches, a sore throat, a rash, slurred speech, and allergies. In 1975 he was given an EEG; the result was abnormal. Dr. Hambrook, a neurologist, and Dr. Bender, a neurosurgeon, found no signs of heavy metal intoxication when they tested him in 1974. After seeing Dr. Olwin for treatment, Donald improved and felt “pretty good” by trial time.

Rebecca Johnson started experiencing stomach pains along with listlessness and a lack of strength in 1968. Her condition began to improve around 1973.

Elizabeth Johnson started feeling ill about 1967, experiencing stomach pains and a virus from which she recovered slowly, in addition to a skin rash and nervousness.

Dr. Olwin, the family physician, found high levels of lead in the urine of each family member and believed that the ill health of the family, except for Rebecca’s, was linked to the high levels of lead. Dr. Ann Reynolds of Ohio State University testified that blood and hair samples from the plaintiffs indicated very high levels of mercury for Fred, Donald, Rebecca and Mrs. Johnson and that organic mercury in the water was a possible source. The plaintiffs’ levels of lead were about normal, and the levels of mercury were not in the poisoning range.

Dr. John W. Clayton of the University of Arizona, who had been at the University of Wisconsin at the time that he met the Johnsons in 1972, conducted an experiment on the well water with rats, which showed no difference between test groups of rats fed the water over control groups that did not get the water. At his suggestion the plaintiffs conducted a similar experiment with two parakeets in March 1973. The parakeet that drank the well water became very ill and disturbed; the other bird experienced no problems. Dr. Clayton expressed his personal opinion that phenols were hazardous above a “threshold limit value” of 5 ppm, but conceded that this was his opinion only and that he had conducted no studies on the toxicological effects of phenols.

There was evidence that most of the Johnsons’ farm is southeast of the bordering Tipton farm and that the “back” 80 acres of the Johnson farm share a border running east-to-west with a southerly part of the Tipton farm. A hedgerow on the Tipton farm runs from north to south, with the southerly end bordering on the Johnsons’ property about three-fourths of a mile from the Johnsons’ farm house.

An old limestone quarry is located on Tipton’s farm, near the northwest corner. From at least 1963 on Tipton used this quarry to dump all matter of debris, junk and waste, including liquid waste from the Essex Wire Corp. Tipton received barrels of Essex’ wire waste from 1966 through 1975 and would customarily pour this waste out onto the ground and burn it. The Department of Public Health after investigation obtained an injunction against Tipton dated October 4,1972, prohibiting him from “depositing any debris, solvents, chemicals, trash or other materials of any nature” on his property.

Defendant Valspar’s Midwest Synthetics division is primarily involved in manufacturing resins. Waste matter from its processes was, during the time in question, disposed of in 55-gallon drums. This waste contained phenols which were not leachable, i.e., water-soluble. Until the fall of 1971, the wastes were disposed of in a dump in Rockford, but after the dump was closed to liquid waste the EPA instructed the dumping contractor to store the drums elsewhere until the EPA could find a disposal site. There was testimony that the waste contractor started hauling the barrels out to Tipton’s property for storage “in the early seventies.” It was agreed that the waste would be stored in the hedgerow until the EPA could find a disposal site. The barrels from Valspar were removed in December of 1973. At that time the number was estimated at anywhere from 200 to 500 by various witnesses.

Tipton testified that he never actually dumped the contents of any of the barrels onto the ground. However, there was photographic evidence and testimony that many of the barrels were tipped over with the contents leaking onto the ground.

I

We approach plaintiffs’ contention that the verdict was against the manifest weight of the evidence both on liability and actual damages in light of the familiar rule: “It is the jury’s function to determine the preponderance of the evidence, and a reviewing court will reverse only if this determination is against the manifest weight of the evidence.” Lawson v. G. D. Searle & Co. (1976), 64 Ill. 2d 543, 553.

Plaintiffs’ contention that judgment should have been entered for plaintiffs on the issue of liability is subject to the also familiar rule that a judgment n.o.v. is to be entered only in those cases in which all of the evidence when viewed in its aspect most favorable to the opponent, so overwhelmingly favors the movant that no contrary verdict based on that evidence could stand. See, e.g., Walling v. Lingelbach (1976), 65 Ill. 2d 244, 247.

Under the standards, the court properly denied the n.o.v. motion and the jury’s determination is adequately supported by several considerations. First, it appears that the family’s illnesses (and those of the animals) predated the storage of Valspar’s barrels on the Tipton property by several years. Second, although Dennis Johnson believed that the contents of the barrels leaked in a southeasterly direction into the Johnsons’ wells, Ross Brower, a professional geologist, stated that the flow could have been in any of four directions. The jury also viewed the premises and could observe that the Johnson property was uphill from Tipton’s.

The causal link between phenols and the plaintiffs’ health was also subject to question. No medical testimony specifically linked the illnesses to phenols, and testimony by Craig Loudat of the Illinois Department of Public Health suggested the alternative explanation of hazardous levels of bacteria and nitrates in the plaintiffs’ shallow well, which he stated was poorly constructed.

It does not appear that any of the experts who tested the Johnson wells found concentrations of mercury above the State standard for safe drinking water of 2 ppb. Loher’s conclusion that the well had a level of mercury above the standard was based on his assumption that the standard was .5 ppb (his test revealed a level of 1.9 ppb). Nor does anyone appear to have found levels of lead above any accepted safety standard. Dr. Reynolds conceded that blood and hair samples from the plaintiffs showed mercury levels below the poisoning range and approximately normal levels of lead. Dr. Clayton went so far as to state that the disposal of hazardous wastes was “one of the probable causes” for the family’s health problems. Dr. Olwin found abnormally high levels of lead in plaintiffs’ urine specimens when he tested them in 1976 and that there was a likely causal relationship between these levels and the plaintiffs’ ill-being; but his tests also revealed that no family member had blood levels of lead over the Illinois legal level and that only Fred Johnson had an “unacceptable” urine sample obtained by a method other than “provocative testing.” Moreover, nothing in Dr. Olwin’s testimony tied or was intended to tie the plaintiffs’ blood and urine levels of various metals to any particular source. We therefore conclude that the trial court did not err in denying the post-trial motion for a verdict n.o.v., or in denying the alternative motion for a new trial.

II

We also conclude that plaintiffs are not entitled to a new trial based on their claim of trial errors.

Plaintiffs have placed particular emphasis on their claim that they were denied the right to recover nominal and punitive damages without regard to whether they were able to show actual damages. They argue that although the court gave an instruction that the defendants were engaged in an ultrahazardous occupation it erred in refusing to give their instruction No. 14 defining a “trespasser.”

Although the plaintiffs are correct in asserting that every trespass entitles the plaintiff to at least nominal damages (see, e.g., First National Bank v. Amco Engineering Co. (1975), 32 Ill. App. 3d 451, 455), it was not error to refuse the tendered instruction. Plaintiffs reason that the ultra-hazardous instruction was the basis for strict liability, thus that the application of the strict liability doctrine under an ultrahazardous activity would be “akin to the finding of an intentional intrusion of land * * We cannot agree with this reasoning. The Illinois Supreme Court has held that ultrahazardous conduct which causes an intrusion upon land of another, requiring the application of the doctrine of strict liability, is distinct from negligent or intentional intrusion. (Dial v. City of O’Fallon (1980), 81 Ill. 2d 548, 553.) In Dial, the court noted that “conduct intended to cause an intrusion on the plaintiff’s premises * * is the only type of invasion in which “recovery may be sought purely on the basis of the tort of trespass. 1 F. Harper & F. James, Torts, sec. 1.4, at 11-12 (1956).” (81 Ill. 2d 548, 553.) It further relied on the Restatement (Second) of Torts § 158(a) definition of a trespasser as one who intentionally enters land in the possession of (another), or causes a thing or a third person to do so. 81 Ill. 2d 548, 553-54.

Thus an allegation of abnormally hazardous activities does not allow the plaintiffs to dispense with any pleading or proof of intent. Since intent was not pleaded or proved, and negligence was not in issue, the trial court properly refused instructions based on the doctrine of trespass. It follows also that the trial court did not err in giving defendants’ special interrogatory which asked whether the defendant Valspar was guilty of willful and wanton conduct which proximately caused the injuries, which the jury answered “No,” and in refusing plaintiffs’ instruction on punitive damages. Plaintiffs were not entitled to argue and recover punitive damages based on trespass when the elements of the trespass action were not alleged or proved.

Ill

Other trial rulings of which plaintiffs complain did not constitute reversible error. The determination of the admissibility of evidence rests primarily in the discretion of the trial court, and its decisions will be reversed only upon a clear abuse of that discretion. (Country Mutual Insurance Co. v. Adams (1980), 85 Ill. App. 3d 501, 506.) We will refer briefly to plaintiffs’ claims of error, none of which we find to amount to a clear abuse of discretion:

1. Plaintiffs sought to introduce a 1973 EPA letter to Tipton and a 1974 EPA interoffice memo relating to Tipton’s failure to dispose of certain barrels of waste on his property. These dealt with barrels in a quarry some distance from the hedgerow where Valspar’s barrels were kept and, in the circumstances, were irrelevant to the matters on trial.

2. Plaintiffs sought to introduce a newspaper article with reference to Valspar’s alleged discharge of mercury into the Rock River. This was properly excluded both as hearsay and as being irrelevant to Valspar’s storage of barrels on Tipton’s property.

3. Similarly, the 1971 correspondence between Valspar and the Corps of Engineers regarding Valspar’s application to discharge water into the Rock River which had no relevance to the matter on trial was properly excluded both as irrelevant and as constituting hearsay.

4. Correspondence between Valspar and the State of Illinois regarding discharge by Valspar into the Rock River was properly excluded on similar grounds.

5. Photographs of burning on the Tipton farm were properly excluded as irrelevant to the storage of wastes several years later.

6. 1975 laboratory analyses of wells, other than the plaintiffs’, in the general area were properly ruled inadmissible. While plaintiffs state that these analyses were entitled to admission as evidence of the southeasterly water flow from Tipton’s premises it does not appear that that position was taken in the trial court. The record reveals that plaintiffs’ attorney asked Dennis Johnson whether wells other than the plaintiffs’ were analyzed at the time, counsel for defendant Tipton objected on relevance grounds and counsel for plaintiffs thereby withdrew the question. The court then sustained the objection. No evidence linking neighboring wells to anything in the barrels stored on Tipton’s property was adduced. It should also be noted that the court did admit laboratory analyses of the plaintiffs’ wells and was justified in concluding that the analyses of other wells were irrelevant.

7. Contrary to plaintiffs’ contention, the trial court admitted into evidence defendant Valspar’s answers to interrogatories containing lists of chemicals manufactured. The judge indicated that they would not go into the jury room, and plaintiffs did not object.

8. Plaintiffs charge that Valspar refused to cooperate in producing witnesses or exhibits. However, it is unclear what evidence, if any, was, in fact, not produced. The plaintiffs appear to be complaining principally on the lack of knowledge that former Valspar officials displayed at trial, which could have been explained by the passage of about eight years between the time the Valspar barrels were hauled to Tipton’s property and the time of trial. At any rate, it was not shown what, if any, prejudice to the plaintiffs occurred from this complaint.

9. Plaintiffs sought to introduce a display of Valspar’s 1980 product line. This was properly denied as irrelevant to storage of materials produced no later than 1972.

10. Plaintiffs sought to introduce certain bottles and a ruptured can of paint found by Dennis Johnson near the Tipton hedgerow. The court properly rejected the introduction of these items as against Valspar, as no connection between the items and Valspar was established. Moreover, all of the jars were admitted, and the only things excluded were a quarter-pint can of paint and two paint rollers.

11. Plaintiffs complain of the exclusion of testimony of Dennis Johnson regarding the samples taken from Tipton’s farm and testimony on the effects of undissolved phenols. However, the testimony was properly excluded for failure to lay a proper foundation and because of the improper assumption of facts not in the record as a basis for the questioning.

12. Plaintiffs’ medical bills were properly rejected for lack of foundation showing any relationship between the bills and the alleged pollution-related illnesses.

13. The court did not err in refusing to allow evidence of the cost of analyzing plaintiffs’ waste samples. It was irrelevant.

14. The plaintiffs for the first time in their reply brief refer to the testimony of Loher on his observation of water samples from the Johnsons’ well and claim that his testimony was unduly restricted. Loher’s opinion as to what was in the drums was properly excluded as speculation; thus, so was his testimony as to the connection between the water and the drums since there was no evidence that Loher did more than see and smell the drums. Further, the question objected to related to Loher’s observations of the quarry and not the hedgerow where Valspar’s barrels were stored.

15. The trial court permitted Marshall Hungness, who had resided with his family on the Johnson premises since October 1977, to testify that he and his family had suffered no health problems from the water on the premises and that the Illinois EPA had analyzed well water from the farm in 1979 and found no problems. Plaintiffs assert it was error to allow such testimony, yet the record reveals no objection to any of the testimony at the trial. Moreover, Hungness had lived on the farm since late 1977 and evidence of his physical condition at that time was relevant to the issues of what effects the alleged contaminants had, and whether leaks from Tipton’s barrels were the cause of any illnesses reported years after the storage of the barrels on Tipton’s property.

IV

Plaintiffs urge that the court erred in dismissing Elizabeth Johnson Schoon and Rebecca Johnson Hampton as parties plaintiff.

Elizabeth and Rebecca were named as parties plaintiff for the first time in counts IV and V of the second amended complaint, which was filed June 29, 1974. The defendants moved, before trial, to dismiss the entire complaint as barred by the statute of limitations (Ill. Rev. Stat. 1977, ch. 83, par. 15). The trial court denied the motion as to Mr. and Mrs. Johnson, Donald Johnson, and Fred Johnson, but granted it as to Elizabeth and Rebecca. We agree with Elizabeth and Rebecca that the trial court erred, and we reverse.

Counts IV and V of the second amended complaint do not state valid causes of action in trespass as no possessory interest in the land is asserted by Elizabeth and Rebecca. (Krejci v. Capriotti (1973), 16 Ill. App. 3d 245, 247; Smith v. Wunderlich (1873), 70 Ill. 426, 434.) However, counts IV and V do state valid causes of action for strict liability (ultrahazardous activity) and negligence, and we are unable to say that these causes of action are, as a matter of law, barred by the applicable two-year limitation.

Counts IV and V allege that the seepage of chemicals onto the Johnson property continued up until January 23, 1976. Where a tort involves a continuing or repeated injury, the limitation period does not begin until the date of the last inquiry or when the tortious acts cease. (City of Rock Falls v. Chicago Title & Trust (1973), 13 Ill. App. 3d 359, 364.) The complaint alleges a course of tortious conduct which brings it within the two-year period. Alternatively, we hold the “time of discovery” rule applicable to the injury alleged. Under this rule, the cause of action does not accrue until the plaintiff knows or reasonably should know of an injury and also knows or reasonably should know that the injury was caused by the wrongful acts of another. (Nolan v. Johns-Manville Asbestos (1981), 85 Ill. 2d 161; Witherell v. Weimer (1981), 85 Ill. 2d 146.) When a plaintiff is on such notice is generally a question for the trier of fact. (Witherell v. Weimer (1981), 85 Ill. 2d 146, 156.) Here, Elizabeth and Rebecca were dismissed before trial; and we thus cannot determine as a matter of law from their pleadings when they were on notice of the injury or that such injury was wrongfully caused. We therefore hold that the trial court erred in dismissing them as parties plaintiff and that they are entitled to pursue their causes of action for personal injuries under counts IV and V of the second amended complaint.

We conclude that the jury’s verdict was not against the manifest weight of the evidence as to either defendant and that the judgments in favor of both defendants were proper. The cause of action as to Elizabeth Johnson Schoon and Rebecca Johnson Hampton, however, is not barred by the statute of limitations as a matter of law, and the order dismissing them as plaintiffs is reversed and the cause remanded as to them. Based upon our resolution of the case as to the trial parties and considering that the case on retrial may be different from the record before us, we do not reach other issues urged by the plaintiff.

The judgments finding in favor of the defendants and against the plaintiffs, Marvin Johnson, Violet I. Johnson, Donald Johnson, and Fred Johnson, are affirmed; the order dismissing Elizabeth Johnson Schoon and Rebecca Johnson Hampton as parties plaintiff is reversed and the cause remanded as to them.

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

UNVERZAGT and VAN DEUSEN, JJ., concur.


text:
    DAMEN SAVINGS AND LOAN ASSOCIATION, Plaintiff-Appellant, v. HERITAGE STANDARD BANK AND TRUST COMPANY, Trustee, et al., Defendants-Appellees.
    Second District
    No. 81-378
    Opinion filed January 19, 1982.

      John K. Wheeler, of Wheeler and Wheeler, of Woodridge, for appellant.
    John V. DeStefano, of John H. Barcelona, Ltd., of Oak Lawn, for appellees.
   PRESIDING JUSTICE SEIDENFELD

delivered the opinion of the court:

Whether a “due-on-transfer” clause in a mortgage becomes operative upon transfer of record title to the trustee under a standard Illinois Land Trust is the question before us. The trial court dismissed the complaint of Damen Savings and Loan Association (mortgagee) for foreclosure, concluding that the conveyance to Heritáge Standard Bank and Trust Company, as trustee, was not a sale or a transfer within the contemplation of the mortgage clause. The mortgagee appeals.

The trial court held as a matter of law that the transfer was not a conveyance or sale contemplated by the parties because the signers of the mortgage, as beneficiaries of the land trust, remained in possession, albeit their interest became personal property; thus, the transfer did not endanger the mortgagee’s security interest in the mortgaged property. We cannot agree.

Both parties have cited the decision of the Illinois Supreme Court in Baker v. Loves Park Savings & Loan Association (1975), 61 Ill. 2d 119, in support of their respective positions. In Baker, the court upheld a “due-on-sale” clause, which called for a 1% increase in interest upon a “sale, assignment or transfer of any right, title or interest in the property or any portion thereof,” as a reasonable restraint on alienation. The court held that the reasonableness of the restraint on alienation must be judged by the “underlying purpose of the restraint” (61 Ill. 2d 119, 124), and that the restraint was valid in the case before them as reasonably related to a legitimate lender’s purpose, which included not only reliance on the property mortgaged as security for the obligation but also protection against transfer of the property to a person whose personal and financial qualities were unknown to and never considered by the lender in making the loan. (61 Ill. 2d 119, 125.) The court rejected the view that the reasonableness of the restraint should be judged by the circumstances of each particular case, stating that “the valid and accepted purpose sought to be achieved by the restraint * * *, the protection of the lender’s security interest, must determine the validity of the restraint and not the circumstances of each particular case.” (61 Ill. 2d 119, 126.) The court noted:

“Since stability of real estate titles is of paramount importance it is necessary that the court follow a policy in construing restraints on alienation which will produce a reasonable degree of certainty. An attorney, in construing a restraint in a chain of title, should be able to reasonably predict the effect of the restraint and whether it will or will not be enforced. (57 Mich. L. Rev. 1173, 1186-87; Manning, The Development of Restraints on Alienation Since Gray, 48 Harv. L. Rev. 373, 405 (1935).) We feel that in cases involving consent to sell restraints, judging the reasonableness of the same under the circumstances in each case would not promote the desired stability of titles and would in fact make it extremely difficult to predict whether a restraint will or will not be upheld. « « «
Although the validity of the restraint is not to be determined under the circumstances of each case we consider that a court may relieve a borrower from unconscionable or inequitable conduct of the lender. (Malouff v. Midland Federal Savings and Loan Association (1973), 181 Colo. 294, 509 P.2d 1240; Gunther v. White (Tenn. 1973), 489 S.W.2d 529.) The charge of the additional 1 percent interest is not unreasonable and in this case does not constitute unconscionable or inequitable conduct on the part of the lender.” 61 Ill. 2d 119, 126-27.

In the case before us the mortgage clause provided:

“It is further agreed and understood by and between the parties hereto that should the above described real estate, at any time hereafter, be sold or title thereto transferred by deed of conveyance or by operation of law, then the ¿mount of principal balance then remaining due secured by this mortgage shall become immediately due and payable at any time hereafter at the option of the owner or holder of this mortgage.”

The plain language of the clause is that the remaining mortgage shall become payable should title to the property be “transferred by deed of conveyance”; this is plainly what occurred here. Upon transfer, full title to the property vested in the trustee, and the mortgagors under settled Illinois law were left with only personal property, the beneficial interest in the land trust. E.g., Chicago Federal Savings & Loan Association v. Cacciatore (1961), 33 Ill. App. 2d 131, 139.

We are also unable to agree with the reasoning that the lender’s interests in the security and in the identity of its borrowers were not endangered by the transfer. Although the transfer itself may not violate these interests, it leaves the lender defenseless against future actions by the borrower that could do so. A transfer of the beneficial interest in a land trust is not a conveyance of an interest in real property, and thus would not violate the “due-on-transfer clause.” (Levine v. Pascal (1968), 94 Ill. App. 2d 43, 50.) Thus, not only would the mortgagee be unable to stop the transfer of possession and control of the property to an unknown third party, but because the transfer of a beneficial interest in a land trust need not be recorded (and, in fact, the trustee may not notify the mortgagee of the transfer unless directed to by the beneficiary), the mortgagee will generally be unaware of any such transfer. (Flaherty, Illinois Land Trusts and the Due-On-Sale Clause, 65 Ill. B.J. 376 (1977).) Based upon the reasoning of the Illinois Supreme Court in Baker, we conclude that the due-on-transfer clause is applicable to a conveyance from the individual mortgagors to a trustee under an Illinois land trust as a restraint on alienation reasonably imposed to protect the security interests of the lender.

We also do not believe that Baker may be distinguished by the nature of the particular due-on'-transfer clauses at issue. To do so would flatly ignore Bakers holding that the reasonableness of restraints on alienation must not be judged by the circumstances of each case. Thus, the appellate court has recently upheld enforcement of a clause calling for acceleration of all payments due upon transfer of the mortgaged property when its purpose was in “part, at least” to protect the lender’s security interest. Provident Federal Savings & Loan Association v. Realty Centre, Ltd. (1981), 101 Ill. App. 3d 277,

The particular issue involved in this case apparently has not been directly decided in Illinois. However, there is precedent under Federal law that a “due-on-sale” clause giving the lender the right to accelerate the payments due under its secured loan upon any conveyance or transfer of title would be “triggered” by the transfer of the real estate subject to the existing mortgage from the borrowers to themselves as trustees. (Williams v. First Federal Savings & Loan Association (E.D. Va. 1980), 500 F. Supp. 307, aff'd (4th Cir. 1981), 651 F.2d 910.) In Williams, the transfers were to Virginia land trusts, and from the record it appeared that borrowers then assigned all of their rights and beneficial interests to their respective purchasers. The court, however, found that it did not need to determine the validity of the land trusts or to determine whether the interests of the beneficiaries were personal property since any conveyance or transfer of title including conveyance to the borrowers as trustees constituted a breach of the due-on-sale clause. 500 F. Supp. 307, 309.

Fidelity Land Development Corp. v. Rieder & Sons Building & Development Co. (1977), 151 N.J. Super. 502, 377 A.2d 691, relied upon by the defendants, is distinguishable. There, the court, upholding a trial court decision made after a full evidentiary hearing, held that the transfer of title to undeveloped land from a corporation to the president and principal shareholder for a nominal consideration was not a transfer that the parties intended to trigger enforcement of a due-on-sale-clause. The court reasoned that there was no possible danger to the security, since the land was undeveloped and therefore could not depreciate for lack of care in maintenance; that the lender had no interest in the identity of the mortgagor because its recourse was limited to the land itself; that the conveyance was simply to the corporate borrower’s alter ego and thus involved no chance of a subsequent change of possession or control; and that any danger to the security had been cured by the retransfer of the land to the corporation. We have before us in this case the order dismissing the complaint decided purely as a question of law. Here there is a great chance of a subsequent change of possession or control as to which the lender could have no control.

Were we to hold that a conveyance to a land trustee without more did not bring into play the due-on-transfer clause, we would effectively be overruling Baker. If a mortgagor were able to transfer title to property to a trustee without triggering a due-on-transfer clause, the mortgagor would be able to effect a sale of the property by first transferring title to a trustee, then transferring the beneficial interest in the land trust to the trustee, or any other third party, without the consent or even the knowledge of the mortgagor. Baker holds that a mortgagee may enforce a due-on-transfer clause upon the outright sale of the mortgaged properties; to prevent similar enforcement upon conveyance of land to a trustee under an Illinois land trust could give the mortgagor a free hand to do in two steps what the mortgagee has the right to prevent him from doing in one step. This could make the due-on-transfer clause valueless as a practical matter.

The defendants also argue that the plaintiff should be barred from invoking the due-on-sale clause based on the equitable doctrine of laches. The argument is based on the reasoning that the transfer to the land trustee was made of record on March 21,1979, and as a public record was available to the plaintiff. In Baker, the supreme court left undisturbed traditional equitable defenses to enforcement of the due-on-sale clause noting that “a court may relieve a borrower from unconscionable or inequitable conduct of the lender. * * * We also consider that other traditional equitable defenses may be raised by a mortgagor.” (61 Ill. 2d 119,126-27.) The complaint for foreclosure was not filed until January 28, 1981, and on remand the court may determine when the plaintiff was on notice of the transfer and whether its conduct amounted to unreasonable delay to the prejudice of the defendants. See First National Bank v. Brown (1980), 90 Ill. App. 3d 215, 218-19.

We therefore reverse the judgment and remand the cause with directions to vacate the order dismissing the complaint for foreclosure, to permit the plaintiff to further plead, and for further proceedings in accordance with this opinion.

Reversed and remanded with directions.

UNVERZAGT and VAN DEUSEN, JJ., concur.

        Provident noted that it was required to follow the approach of Baker by judging the reasonableness of a restraint by the purpose sought to be obtained rather than by a case-by-case application. (101 Ill. App. 3d 277, 279.) The court, however, refused to extend the purpose-oriented approach solely to protect the lender during a period of rising interest rates unless the clause expressly stated that it was for that purpose.


author: JUSTICE VAN DEUSEN JUSTICE NASH,

text:
    THE PEOPLE OF THE STATE OF ILLINOIS, Plaintiff-Appellee, v. MICHAEL BROWN, Defendant-Appellant.
    Second District
    No. 80-224
    Opinion.filed January 22, 1982.

      Mary Robinson and David S. Morris, both of State Appellate Defender’s Office, of Elgin, for appellant.
    J. Michael Fitzsimmons, State’s Attorney, of Wheaton (Barbara A. Preiner, Assistant State’s Attorney, of counsel), for the People.
   JUSTICE VAN DEUSEN

delivered the opinion of the court:

Defendant, Michael Brown, entered pleas of guilty to the offenses of home invasion (Ill. Rev. Stat. 1979, ch. 38, par. 12—11(a)(1)) and aggravated kidnapping for ransom (Ill. Rev. Stat. 1979, ch. 38, par. 10—2(a)(1)) and was sentenced to concurrent terms of 30 years imprisonment. He appeals, contending these sentences were excessive and disparate from 12-year sentences he received for similar offenses in Kane County.

On October 29, 1979, after being fully admonished by the trial court pursuant to Supreme Court Rule 402 (Ill. Rev. Stat. 1979, ch. 110A, par. 402), defendant entered pleas of guilty to these Class X offenses. The only plea agreement made with the State was that the State’s Attorney would make no recommendation as to sentence and the remaining eight counts of the indictment would remain in force until after sentencing. The trial court was made aware there were similar charges then pending against defendant in Kane County and advised defendant that he would not necessarily receive concurrent sentences in the respective counties.

In its statement of the facts upon which the pleas were based, the State informed the court that on July 24,1979, at about 11 a.m. defendant knocked on the door of the residence of Irma Beinhauer in West Chicago. He informed her he was doing a survey of the local sewer situation, and when she unlocked the screen door he forced his way in and produced a pellet gun which resembled a Luger pistol. Defendant ordered Mrs. Beinhauer, her two children and her uncle into the Beinhauer automobile and directed her to drive to a bank in West Chicago. There he directed Mrs. Beinhauer to draft a personal check to withdraw money from her account, but while waiting for the check to be cashed defendant became nervous and ordered her to drive off without obtaining the money.

The group then proceeded to Kane County where, by threatening use of the pellet gun, he forced Lydia Freeman to leave her residence and accompany them to her bank in St. Charles. The police had been alerted and, although defendant attempted to escape, he crashed the car in which he and all of the victims were still riding. Defendant was then arrested and subsequently returned to Du Page County.

The presentence report also noted defendant was 23 years old at the time of these offenses. He was recently unemployed and lived with his girlfriend, whom he planned to marry, and her son, whom he helped support. Defendant had been convicted of misdemeanor theft by deception in 1974 and fined $70. He had also been convicted of armed robberies which occurred June 24,1975, and July 2,1975, and on August 30,1975, he was sentenced to concurrent terms of four years imprisonment. Defendant was released on parole after serving two years of his term, having been granted meritorious good time credit by the Department of Corrections. He was on parole at the time of the present offenses, and his parole officer gave him a favorable report for that period.

The presentence report further stated that defendant got along well with his parents and that he believed he had emotional problems which caused him to commit the offenses. He had used drugs prior to his convictions in 1975 but had not done so since that time. A psychologist testified at the sentencing hearing that defendant could appreciate the criminality of his conduct but had difficulty differentiating between reality and fantasy. He stated that defendant had a schizophrenic disorder and was probably experiencing a psychotic episode during the offenses in question. Defendant’s father, mother and girlfriend also testified. Lawrence Brown stated that defendant had been taken to a psychiatrist at age 12, but he would not cooperate in treatment and it was discontinued. He also testified that defendant had no serious childhood problems and was never violent. Sharon Brown testified that defendant always had an impulsive, obsessive personality. In his own testimony, defendant expressed remorse for the victims of the offenses and regretted committing them. He asked the court for leniency so that he could obtain help for his mental problems, which he asserted were the cause of his committing the offenses in question.

We note that, while the circumstances of the 1975 armed robberies do not appear in the record, there is no evidence that physical harm was inflicted by the defendant in the commission of those offenses. Although defendant used a pellet gun and the Beinhauers’ automobile collided with several other vehicles in the present offenses, no one was physically harmed. Two of the victims of the present offenses reported they had difficulty sleeping afterwards and had become nervous. Additionally, the Beinhauers’ automobile insurance premiums increased as a result of it being damaged when defendant attempted to avoid arrest in Kane County.

In imposing sentence on December 19, 1979, the trial judge considered, on the record, the appropriate sentencing factors and the presentence report submitted to him. In doing so, the judge reviewed the nature of defendant’s conduct in Du Page County, upon which these charges were based, and also remarked upon the facts pertaining to the then-pending Kane County charges, noting defendant had there forced Mrs. Freeman to leave her home and enter the car and had also attempted to escape when the police approached. The trial court then imposed the sentences from which defendant appeals.

On February 7,1980, defendant was sentenced in the circuit court of Kane County, on. his guilty plea, to concurrent terms of 12 years’ imprisonment for aggravated kidnapping and armed robbery, based upon his abduction of Mrs. Freeman and the taking of $60 from her purse.

Defendant’s motion to withdraw his guilty pleas in the present case was heard on March 7,1980. It did not refer to the Kane County sentences and was premised upon the general issue that his Du Page County sentences were not in keeping with defendant’s mental history and background. The motion to withdraw the pleas was denied, and defendant has appealed.

Defendant contends that his Du Page County sentences must be presumed to be excessive and an abuse of the trial court’s sentencing discretion because they were disparate to the sentences imposed upon him in Kane County for similar offenses, citing, inter alia, People v. Henne (1973), 10 Ill. App. 3d 179. We recognize the established rule that fundamental fairness and respect for the law require that defendants similarly situated not receive grossly disparate sentences. (People v. Bares (1981), 97 Ill. App. 3d 728, 738; 10 Ill. App. 3d 179, 180.) This rule of law does not deal with the issue of whether a sentence is excessive or insufficient, but, rather, it deals with the unfairness of imposing unequal sentences upon codefendants for the commission of the same offense. We reject any contention that such rule of law has any application to sentences imposed upon a single defendant for the commission of similar or identical, but separate, offenses. The disparity between the sentences imposed subsequently by the trial court in Kane County and the sentences imposed by the trial court in Du Page County in this case is no indication that the Du Page County sentences were excessive any more than it is an indication that the sentences imposed in Kane County were insufficient.

Defendant also contends that the 30-year sentences are otherwise excessive and requests that they be reduced to the 12-year terms imposed in Kane County. He emphasizes his strong family ties, youth and lack of physical injury to his victims. (See People v. Moon (1976), 38 Ill. App. 3d 854, 865.) He refers to his remorse and awareness that his bizarre conduct constituted serious crimes. Defendant expressed his understanding at the sentencing hearing that it was necessary for him to go to prison and stated he hoped he would receive help for his mental problems.

A reviewing court has authority to reduce a sentence as excessive only if it is determined that the trial court abused its discretion in imposing it. (People v. Cox (1980), 82 Ill. 2d 268, 275; People v. Perruquet (1977), 68 Ill. 2d 149, 154.) A sentence imposed by a trial court will not be disturbed unless it clearly appears that the penalty constitutes a great departure from the fundamental law and its spirit and purpose; a sentence which both reflects the seriousness of the offense and gives adequate consideration to the rehabilitative potential of the defendant will be upheld. People v. Heflin (1978), 71 Ill. 2d 525, 545, cert. denied (1979), 439 U.S. 1074, 59 L. Ed. 2d 41, 99 S. Ct. 848.

Initially, we note that the presentence report considered by the trial judge did make reference to the similar pending charges in Kane County which arose out of a continuation of defendant’s conduct in Du Page County. It stated that defendant had sought to enter a plea of guilty in Kane County, but the trial judge there had refused to accept it because defendant’s original attorney had been the prosecutor in 1975. The report indicated that a new attorney had been appointed and the case was awaiting the outcome of diagnostic tests of defendant taken at the Isaac Ray Center in Chicago. It is suggested that the trial court improperly considered such evidence.

Arrests and pending charges not yet resulting in convictions, or the conduct upon which they are based, may not ordinarily be considered in determining the length of a sentence to be imposed. (People v. Tiess (1981), 97 Ill. App. 3d 45, 51.) However, in the present case, the commission of the offense of aggravated kidnapping for ransom for which defendant was being sentenced in Du Page County did not end at the county line but rather continued into Kane County. It was not concluded until defendant, in his abortive attempt to escape, crashed his car, in which the Du Page County victims were still riding, and was then apprehended by the police in Kane County. Defendant’s conduct in Kane County, although it included facts concerning the abduction of Mrs. Freeman for which the defendant was charged in Kane County, was necessarily and properly before the Du Page County sentencing judge in this case.

In its recent decision in People v. La Pointe (1981), 88. Ill. 2d 482, the supreme court has again clarified the extent to which evidence of criminal ' conduct may be introduced at sentencing hearings even though that misconduct has not been the subject of prosecution and conviction. A sentencing judge has wide discretion in the sources and types of evidence used to assist him in determining the kind and extent of punishment to be imposed within the limits fixed by the law. He is not limited to considering only information which would be admissible under the adversary circumstances of a trial so long as he exercises care to insure the accuracy of the information considered. (People v. La Pointe (1981), 88 Ill. 2d 482, 496.) Our review of the record discloses that the trial judge did not violate these standards in sentencing the defendant.

In imposing sentence, the trial court found in mitigation that the defendant did not inflict or intend to inflict bodily harm to the victims. The court added, however, that the defendant came very near to causing harm to the victims and did find in aggravation that defendant’s sentence was necessary to deter others from committing the same offense, that defendant had a prior history of criminal activities which included two armed robberies, and that the defendant’s character and attitudes indicated that he was likely to commit another crime.

After careful review, we cannot say that the trial court abused its discretion in its imposition of sentences on the defendant in this case.

The judgment and sentences of the trial court are affirmed.

Affirmed.

REINHARD, J., concurs.

JUSTICE NASH,

dissenting:

I respectfully dissent having concluded from the record of the sentencing hearing that the trial judge improperly considered the then pending charges in Kane County in imposing sentence.

As noted by the majority, arrests or pending charges will not ordinarily be considered in determining the length of a sentence. (See People v. Fritz (1979), 77 Ill. App. 3d 1, 6, rev’d on other grounds (1981), 84 Ill. 2d 72; People v. Smothers (1979), 70 Ill. App. 3d 589, 591; see also People v. Siefke (1981), 97 Ill. App. 3d 14.) Generally it is presumed that a sentencing judge will disregard information improperly included within a presentence report, but that presumption is rebutted if the record reflects the court did, in fact, consider such evidence. (E.g., People v. Brown (1980), 91 Ill. App. 3d 163 (court made specific reference to evidence); People v. De Groot (1968), 108 Ill. App. 2d 1 (court overruled objection to evidence).) In the present case, the trial judge expressly referred to and reviewed defendant’s conduct in Kane County for which charges were then pending. It cannot, therefore, be presumed that conduct of defendant did not, in part, form a basis for the severe sentences imposed.

I would remand for a new sentencing hearing to be certain defendant was not sentenced in both Du Page and Kane counties for the same conduct. Compare People v. Poll (1980), 81 Ill. 2d 286, 289.


text:
    THE CITY OF NAPERVILLE, Plaintiff-Appellee, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant.—THE CITY OF BATAVIA, Plaintiff-Appellee, v. THE DEPARTMENT OF REVENUE, Defendant-Appellant.
    Second District
    Nos. 81-207, 81-222 cons.
    Opinion filed January 22, 1982.
    Tyrone C. Fahner, Attorney General, of Chicago (Imelda R. Terrazino, Assistant Attorney General, of counsel), for appellant.
    Katherine S. Janega and Marvin J. Glink, both of Ancel, Glink, Diamond, Murphy & Cope, P. C., of Chicago, for appellees.
   JUSTICE REINHARD

delivered the opinion of the court:

These actions, consolidated on appeal, were brought in the circuit courts of Du Page and Kane counties under the Administrative Review Act (Ill. Rev. Stat. 1979, ch. 110, par. 264 et seq.) to review final assessments made by the Department of Revenue against the cities of Naperville and Batavia for State public utilities tax liability (Ill. Rev. Stat. 1979, ch. 120, par. 468 et seq.). On February 19, 1981, the circuit court of Du Page County entered an order in the case of City of Naperville v. Illinois Department of Revenue, which in pertinent part found:

“2. ‘Gross receipts’ which are subject to a 5$ tax under the provisions of the Public Utilities Revenue Act, Ch. 120, Ill. Rev. Stat. §468 et seq. (1977) does not include the municipal tax that is billed separately to each user of an electric utility and reflected in the general fund of the plaintiff, City of Naperville, rather than its electric utility fund. This determination is directly analogous to that made by the Illinois Supreme Court in Getto v. City of Chicago, 77 Ill. 2nd 346, 396 N.E.2d 544 (1979).”

An identical order, excepting the name of the city, was entered on the same day by the circuit court of Kane County in City of Batavia v. Illinois Department of Revenue. It is.this portion of the orders from which the cities appeal.

The Department of Revenue contends on appeal that the circuit courts erred in holding that the term “gross receipts” contained in the Public Utilities Revenue Act does not include the receipt of the municipal public utilities tax collected by the cities from its resident consumers of electricity. It was established at both of the separate administrative hearings before the Department of Revenue that the cities record the receipt of the municipal tax in their general corporate fund and do not include it in their separate electric utility fund. The taxing structure at issue in this case can be summarized as follows.

The cities of Naperville and Batavia each operate an electric utility whereby each purchases power at wholesale and distributes and resells it to its residents. As such, these municipalities are subject to a 53> “gross receipts” tax imposed by the State under the authority of section 2 of the Public Utilities Revenue Act (Ill. Rev. Stat. 1979, ch. 120, par. 469). Also, under the terms of the Illinois Municipal Code, corporate authorities of any municipality are authorized to tax persons “engaged in the business of distributing, supplying, furnishing, or selling electricity for use or consumption within the corporate limits of the municipality, and not for resale, at a rate not to exceed 5% of the gross receipts therefrom.” (Ill. Rev. Stat. 1979, ch. 24, par. 8—11—2.) Since the citites themselves are the persons distributing, supplying, and selling the electricity, they charge their customers (the city residents) this 5$ municipal tax. This procedure is authorized by section 36(a) of the Public Utilities Act (Ill. Rev. Stat. 1979, ch. 111 2/3, par. 36(a)).

The 5^ State tax imposed on Naperville and Batavia pursuant to the Public Utilities Revenue Act is to be based on the “gross receipts” of these cities from the sale and distribution of electricity. Section 1 of the Public Utilities Revenue Act defines “gross receipts” as follows:

“ ‘Gross receipts’ means the consideration received for electricity distributed, supplied, furnished or sold to persons for use or consumption and not for resale and for all services rendered in connection therewith, including amounts received from minimum service charges, and includes cash, services and property of every kind or nature, and shall be determined without any deduction on account of the cost of the service, product or commodity supplied, the cost of materials used, labor or service costs, or any other expense whatsoever.” Ill. Rev. Stat. 1979, ch. 120, par. 468.

The Department’s sole contention is that the term “gross receipts” as defined by the Public Utilities Revenue Act should include the 5% tax which the cities charge their resident consumers of electricity pursuant to section 8—11—2 of the Illinois Municipal Code and section 36(a) of the Public Utilities Act.

The trial court determined, and the cities assert on appeal, that the Illinois Supreme Court decision in Getto v. City of Chicago (1979), 77 Ill. 2d 346, 396 N.E.2d 544, is controlling as applied to the facts in the case at bar. In Getto, plaintiff, individually and as the representative for a class of similarly situated telephone subscribers, brought suit against the city of Chicago and Illinois Bell Telephone Company alleging collection óf sums in excess of the amount due under the municipal message tax. The message tax authorized the corporate authorities to impose a tax on persons engaged in the business of transmitting messages by means of electricity at a rate not to exceed 5% of the gross receipts for such business. (Ill. Rev. Stat. 1979, ch. 24, par. 8—11—2.) The tax was passed on to the telephone customers by Illinois Bell as authorized by the Public Utilities Act. (Ill. Rev. Stat. 1979, ch. 111 2/3, par. 36(a).) The defendants mGetto had construed the term “gross receipts,” upon which the message tax was based,- to include not only customer billings, but also taxes imposed on those billings, including the message tax itself. (77 Ill. 2d 346, 351, 396 N.E.2d 544.) The court used the following example in describing the effect of this taxing procedure:

“* ° ° if a customer’s pretax monthly bill were $10 (ignoring, for the sake of simplicity, the existence of Federal and State taxes), the amount upon which the municipal tax is imposed would not be $10, but $10.50. This results in a municipal tax of 52)2 cents, instead of 50 cents, plus a correspondingly larger amount withheld by Bell for its accounting costs.” (77 Ill. 2d 346, 351, 396 N.E.2d 544.)

After deciding that the plaintiff had standing to bring the action and that he was not required to exhaust his administrative remedies by proceeding before the Illinois Commerce Commission, the court held that the city’s message tax could not properly be included in the tax base upon which the same tax was calculated. In so holding the court stated:

“The definition of ‘gross receipts’ contained in section 1 of the Messages Tax Act provides that, ‘In case credit is extended, the amount thereof shall be included only as and when payments are received.’ (Ill. Rev. Stat. 1977, ch. 120, par. 467.1.) Although no similar provision is contained in the Chicago ordinance, it is clear that services provided on credit are not includable in ‘gross receipts’ until payment is actually received. The long-established rule is that the ‘Taxing laws are to be strictly construed and they are not to be extended beyond the clear import of the language used. If there is any doubt in their application they will be construed most strongly against the government and in favor of the taxpayer. Peoples Gas Light Co. v. Ames, 359 Ill. 152.’ (Oscar L. Paris Co. v. Lyons (1956), 8 Ill. 2d 590, 598.) Although the tax was levied upon Bell, it was passed on to the subscriber, and no liability was incurred on Bell’s part until payment was actually received. It would appear, therefore, that plaintiff, as the one who paid the tax, is entitled to the benefit of the foregoing rule, and its application would proscribe the construction of the statute which would result in an increase, both in the amount of the tax paid the city and the ‘costs of accounting’ permitted to be charged by the nominal taxpayer. We hold, therefore, that construing the term ‘gross receipts’ to include the municipal tax is erroneous.” 77 Ill. 2d 346, 359, 396 N.E.2d 544.

At first glance, the Getto case might appear to be controlling of the issue in the case at bar. The definition of “gross receipts” contained in section 8—11—2 of the Illinois Municipal Code, which was at issue in Getto, is identical in all relevant respects with the definition contained in section 1 of the Public Utilities Revenue Act which is at issue in the present case. However, on closer examination, we find the rationale for the result in Getto to be wholly inapplicable to the facts in the present case.

Due to the taxing structure at issue in Getto, the telephone company could pass on the incidence of the municipal message tax to its subscribers. The effect of this was to impose the burden of the tax directly on the subscribers. However, as the supreme court noted, “no [tax] liability was incurred on Bell’s part until payment was actually received” from its subscribers. (77 Ill. 2d 346, 359, 396 N.E.2d 544.) Illinois Bell, however, adopted a formula for the addition of a percentage to be added to the net pretax billings in order for it to retain the same amount of dollars after the municipal tax was applied as before the tax was applied. Since Illinois Bell had not yet received payment for its service at the time of billing, the tax could only be computed on amounts it anticipated receiving. Thus, the telephone subscriber was becoming liable for the tax prior to the time at which Bell became liable to the city.

This situation, however, does not exist in the present case. In this case, the taxpayers (the cities of Naperville and Batavia) are separate entities from the consumers of the electricity, and two distinct taxes are involved. Although a portion of the State tax imposed on the cities may be passed on by the cities to the consumers of electricity (Ill. Rev. Stat. 1979, ch. Ill 2/3, par. 36(b)), the State in the present case is not attempting to impose a higher tax on the cities in anticipation of the cities’ receipt of the passed-on amounts. The amount of the State tax is merely being computed, in part, with reference to the cities’ actual receipt of a wholly separate municipal tax from its resident consumers of electricity. Thus, the problem addressed in Getto of “a tax on the tax itself” (77 Ill. 2d 346, 358, 396 N.E.2d 544) is nonexistent in the present case. Also, unlike the situation in Getto, the “consideration received” (Ill. Rev. Stat. 1979, ch. 120, par. 468) by the cities, which includes the 5% municipal tax, is not merely anticipated but is, in fact, actually received by the cities at the time liability for the State tax attaches. In Getto, the customer billings from Illinois Bell included an amount which anticipated the city’s future tax on Illinois Bell’s gross receipts.

The cities, however, attempt to bring this case under the Getto holding by arguing that since the receipt of the municipal tax is recorded in their general corporate funds and not in their separate general utility funds, the tax is not “actually received” by the public utilities. Although it is clear that the cities are acting in a proprietary rather than governmental capacity when supplying their inhabitants with electricity (Springfield Gas & Electric Co. v. City of Springfield (1920), 292 Ill. 236, 250-51, 126 N.E. 739, aff'd (1921), 257 U.S. 66, 66 L. Ed. 131, 42 S. Ct. 24), we do not believe this justifies the cities’ conclusion that the cities are wholly separate entities from the public utilities. The municipal tax is collected by the cities and the fact that they record these receipts in the general corporate fund we view as nothing more than an accounting procedure which is immaterial to the resolution of the issue in this case. See Illinois Power Co. v. Mahin (1977), 49 Ill. App. 3d 713, 719, 364 N.E.2d 597, aff'd (1978), 72 Ill. 2d 189, 381 N.E.2d 222.

Having determined that this case is not directly controlled by the holding in Getto, we turn to a discussion of a case we view as more relevant to the issue presented herein. In Agron v. Illinois Bell Telephone Co. (7th Cir. 1971), 449 F.2d 906, cert. denied (1972), 405 U.S. 954, 31 L. Ed. 2d 231, 92 S. Ct. 1171, the issue before the Federal court of appeals was whether certain occupational taxes imposed on Illinois Bell Telephone Company by the State of Illinois and other Illinois municipalities are properly includable in the base on which the Federal excise tax is computed on “amounts paid for * * * communication services.” The telephone company was authorized to collect the Federal tax from its subscribers to later be paid over to the United States. The plaintiff contended that the telephone company improperly computed the Federal tax by including certain State and local taxes in the Federal excise tax base. The court held that these amounts were properly included in the tax base on which the Federal tax was computed because while the additional charges imposed on the telephone subscribers were attributable to the State and local taxes paid by the telephone company, those charges were nevertheless part of the price demanded for telephone service. The court gave the following rationale for its holding:

“The Government counters that the additional charge is merely part of the compensation demanded by IBT for furnishing the service of transmitting messages; thus, amounts paid to reimburse IBT for its payment of the state and local messages taxes—just as amounts paid to reimburse IBT for all other taxes and for labor costs and equipment repairs—are paid for telephone service within the meaning of the statute. We agree with the Government. All costs incurred in making a product or service available—including the cost of federal, state and local taxes—are ultimately borne by consumers. That the cost of taxes imposed on manufacturers and retailers is added into the price at which goods are sold, even if such taxes are itemized and specifically identified, simply increases the price the consumer must pay to receive the goods or services.” (449 F.2d 906, 912.)

We find this reasoning to be persuasive. The Illinois Supreme Court in Getto found Agron to be inapposite since “the court did not consider the propriety of assessing a tax on the tax itself * 0 (77 Ill. 2d 346, 358, 396 N.E.2d 545.) In neither Agron nor the case at bar was the tax base being computed by the anticipated receipt of the very same tax as in Getto. In the present case, the State tax imposed pursuant to the Public Utilities Revenue Act is merely computed, in part, with reference to a wholly separate tax. Thus, the language in Getto distinguishing Agron does not apply to the present factual situation. Since we find Getto to be inapplicable and Agron to be persuasive, we hold that the term “gross receipts” as defined by the Public Utilities Revenue Act includes the 5% tax imposed pursuant to section 8—11—2 of the Illinois Municipal Code and passed on to the cities’ residents in accordance with section 36(a) of the Public Utilities Act. The 5% municipal tax is merely a part of the total price the cities demand for their electric service and, as such, it is properly includable in their “gross receipts.” See Martin Oil Service, Inc. v. Department of Revenue (1971), 49 Ill. 2d 260, 273 N.E.2d 823; Jones v. Department of Revenue (1978), 60 Ill. App. 3d 886, 377 N.E.2d 202.

Finally, we note that our conclusion is reinforced by the actual definition of “gross receipts” contained in the Public Utilities Revenue Act. Section 1 provides that “gross receipts” “shall be determined without any deduction on account of the cost of service, product or commodity supplied, the cost of materials used, labor or service costs, or any other expense whatsoever.” (Ill. Rev. Stat. 1979, ch. 120, par. 468.) The words “any other expense whatsoever” have been interpreted to be all-embracing in their scope. (Vause & Striegel, Inc. v. McKibbin (1942), 379 Ill. 169, 172, 39 N.E.2d 1006.) Had the legislature intended to permit the exemption of this municipal tax it surely would have so provided. (379 Ill. 169, 172-73, 39 N.E.2d 1006.) In contrast, we note that section 1 of the Public Utilities Revenue Act (Ill. Rev. Stat. 1979, ch. 120, par. 468) expressly allows the public utility to exclude the State tax which is added to customers’ bills in determining the public utility’s gross receipts upon which the amount of tax owed to the State will be based.

Accordingly, for the previously stated reasons, the judgments of the circuit courts of Du Page and Kane counties are reversed.

Reversed.

LINDBERG and NASH, JJ., concur.


author: JUSTICE HEIPLE

text:
    SIGURD VILAND, Plaintiff and Counterdefendant-Appellant, v. JAMES E. McELVAIN, INC., Defendant and Counterplaintiff-Appellee.
    Third District
    No. 81-257
    Opinion filed January 22, 1982.
    Rehearing denied February 24, 1982.
    Mike Sorokas, of Barton & Barton, of Marseilles, for appellant.

      Dallas Ingemunson, of Yorkville, and Wayne McFarland, Jr., of Peacock & Peacock, of Morris, for appellee.
   JUSTICE HEIPLE

delivered the opinion of the court:

The parties to this appeal have done business together over a period of years. They have been involved in many contracts, predominantly oral, for the performance of road construction work and the supply of men and machinery. As is not uncommon, the ultimate resolution of who owes whom and how much is decided in the courtroom. A prologue to the instant appeal would be lengthy. It would involve several lawsuits and issues never adjudicated because of procedural defects. Accordingly, our recitation of the facts is as brief as necessary for the instant appeal; we refer to the earlier lawsuits only as required for resolution of the one narrow issue before this court today: May the plaintiff file a setoff or counterclaim against the defendant’s counterclaim?

On July 21, 1975, plaintiff Sigurd Viland filed a complaint in the Grundy County Circuit Court against defendant James E. McElvain Co., Inc. This complaint alleged that McElvain owed Viland $26,303.04 under the terms of an oral contract which provided that Viland would supply labor and equipment to McElvain on a road building project known as “Collins Road Project” in Grundy County.

On March 20,1981, defendant McElvain answered the complaint and was permitted to file as a counterclaim his claim against plaintiff Viland for allegedly improper work done by Viland on another oral contract, this one entered into on April 27, 1973, for work on the “Griswold Springs Road Project” in Kendall County. Plaintiff Viland then moved to file a setoff and counterclaim, based on the Griswold Project, against the defendant’s counterclaim.

The Griswold Project was the subject of an earlier suit brought by plaintiff Viland against the defendant in Kendall County. Plaintiff Viland claimed that defendant McElvain owed him money for work on the road project. Defendant McElvain counterclaimed for the costs it incurred due to plaintiff Viland’s alleged improper work. However, in February 1981, the Kendall County Circuit Court ordered the case dismissed because plaintiff Viland’s claim was time barred by the statute of limitations (Ill. Rev. Stat. 1979, ch. 83, par. 16).

After plaintiff Viland moved to file his setoff (based on the Griswold Project) against defendant’s counterclaim (also based on the Griswold Project), the defendant objected to plaintiff’s motion because it claimed that the Kendall County Circuit Court’s dismissal of the Griswold suit was an adjudication on the merits which barred the plaintiff’s claim thereupon forever. Plaintiff contends that the Kendall County dismissal was under section 16 of the Illinois statute of limitations and was therefore not an adjudication on the merits.

The Grundy County Circuit Court denied the plaintiff’s motion to file a setoff and counterclaim. The court ruled that the order dismissing the Kendall County complaint was an adjudication on the merits and was dispositive of the issues arising from the plaintiff’s setoff and counterclaim.

On appeal, plaintiff Viland alleges that it was error to deny his motion to file a setoff. We agree.

The plaintiff’s claim based on the Griswold Project was barred by the Illinois statute of limitations. However, the very same statute provides a remedy for time barred claims in that they may be pleaded as a setoff and counterclaim. Clearly such remedy is available to plaintiff Viland. Specifically, it is provided that:

“A defendant may plead a set-off or counter claim barred by the statute of limitation, while held and owned by him, to any action, the causé of which was owned by the plaintiff or person under whom he claims, before such set-off or counter claim was so barred, and not otherwise: Provided, this section shall not affect the right of a bona fide assignee of a negotiable instrument assigned before due.” Ill. Rev. Stat. 1979, ch. 83, par. 18.

When plaintiff’s claim against defendant McElvain on the Griswold Project was dismissed because it was not commenced within the time provided by the Illinois statute of limitations, the dismissal was not an adjudication on the merits of the claim. Defendant McElvain waived the bar of the statute by filing a claim on the Griswold Project in the form of a counterclaim in plaintiff Viland’s suit based on the Collins Road Project. Thus, it was error to deny plaintiff Viland’s statutory right to file his Griswold Project claim as a setoff or counterclaim.

For the reasons herein stated, the judgment of the Grundy County Circuit Court is reversed and remanded for proceedings consistent with this opinion.

Reversed and remanded.

ALLOY and STOUDER, JJ., concur.