People ex rel. Callahan v. Marshall Field & Co.

• Decision Date: 11 April 1980
• Docket Number: No. 78-2013,78-2013
• Citation: 83 Ill.App.3d 811,404 N.E.2d 368,38 Ill.Dec. 944
• Court: United States Appellate Court of Illinois
• Parties: , 38 Ill.Dec. 944 PEOPLE of the State of Illinois ex rel. Edgar CALLAHAN, Director, Department of Financial Institutions, State of Illinois, Plaintiff-Appellee, v. MARSHALL FIELD & COMPANY, Defendant-Appellant.

Page 368

404 N.E.2d 368

83 Ill.App.3d 811, 38 Ill.Dec. 944

PEOPLE of the State of Illinois ex rel. Edgar CALLAHAN, Director, Department of Financial Institutions, State of Illinois, Plaintiff-Appellee, v. MARSHALL FIELD & COMPANY, Defendant-Appellant.

No. 78-2013.

Appellate Court of Illinois, First District, Fifth Division.

April 11, 1980.

Donald G. Kempf, Jr., Howard J. Swibel, G. Christian Kronberg, Chicago (Kirkland & Ellis, Chicago, of counsel), for defendant-appellant.

Wilson & McIlvaine, Chicago (Robert F. Forrer, Michael F. Csar, William J. Ralph, Chicago, of counsel), for amicus curiae Illinois Retail Merchants Association.

William J. Scott, Atty. Gen. of Ill., Chicago (Jerome Webb, Asst. Atty. Gen., Chicago, of counsel), for plaintiff-appellee.

LORENZ, Justice:

Marshall Field & Company (Field) appeals from the granting of summary judgment in a declaratory judgment action brought by the Director of the Department of Financial Institutions (Director). On appeal, Field contends that the Illinois Uniform Disposition of Unclaimed Property Act (Ill.Rev.Stat.1977, ch. 141, par. 101, et seq.) did not apply in general to unclaimed intangible personal property held by business associations prior to 1975. Field also contends that even if the Act did apply to such property, a failure of certain conditions precedent bars the State from taking custody of the monetary value represented by certain unclaimed gift certificates and credit memoranda.

The following facts are pertinent to a disposition of this appeal.

The Illinois Uniform Disposition of Unclaimed Property Act (Ill.Rev.Stat.1977, ch. 141, par. 101, et seq.) provides generally that certain described property be presumed abandoned by its owner. The holder of such presumably abandoned property must file a report each year with the Director describing the particular property and stating the name and last known address of the owner of said property. (Ill.Rev.Stat.1977, ch. 141, par. 111.) Within 120 days from the filing of the report required under Section 111, the Director must publish in newspapers of general circulation a notice listing persons appearing to be owners of abandoned property and stating that any property not duly claimed from the holder thereof will subsequently be placed in the custody of the Director. (Ill.Rev.Stat.1977, ch. 141, par. 112.) Any presumably abandoned property not duly claimed from the holder by the owner after publication must be placed in the custody of the Director. (Ill.Rev.Stat.1977, ch. 141, par. 113.) After properly recording the name and address of the owner and the amount due, the Director must transfer the abandoned property to the State Treasurer for deposit in the State Pensions Fund. (Ill.Rev.Stat.1977, ch. 141, par. 118.) Section 118 further provides, however, that the Director shall retain a fund not exceeding $250,000 for prompt payment of claims made upon the Director by owners of the abandoned property. Any person claiming an interest in property delivered to the Director under the Act may file a claim thereto and no time limitation is placed upon filing of such claim. (Ill.Rev.Stat.1977, ch. 141, par. 119.)

The Director commenced the instant action by seeking a declaratory judgment that the Act as originally enacted in 1961 applied to all unclaimed intangible personal property held by business associations. Specifically, the Director sought a determination that the 1961 Act was applicable to unredeemed gift certificates and credit memoranda issued by Field in the regular course of business and to wages unclaimed by Field's employees. Field answered, denying that the Act applied generally to business associations prior to its amendment in 1975. Field also argued that unfulfilled conditions precedent in the gift certificates and credit memoranda prevented the State from taking custody of those items.

The trial court granted summary judgment in favor of the Director and Field now appeals from that judgment.

I.

Field first contends that the Illinois Uniform Disposition of Unclaimed Property Act (Ill.Rev.Stat.1977, ch. 141, par. 101, et seq.) did not apply generally to unclaimed intangible personal property held by business associations prior to the adoption of section 102a (Ill.Rev.Stat.1977, ch. 141, par. 102a) in 1975.

As originally enacted in 1961 the Act covered certain unclaimed property held by banking or financial institutions (section 102), life insurance companies (section 103), utilities (section 104), and courts or public officers (section 108). The Act was also applicable to all intangible personal property held during a voluntary dissolution (section 106) or by anyone acting in a fiduciary capacity (section 107).

Section 109 of the Act, the "catch-all" provision, encompassed additional property as follows:

"All intangible personal property, not otherwise covered by this Act, including any income or increment thereon and deducting any lawful charges, that is held or owing in this State in the ordinary course of the holder's business and has remained unclaimed by the owner for more than 7 years after it became payable or distributable is presumed abandoned."

Field argues that in order to trigger application of section 109 it is necessary that the holder be one of those specifically mentioned in sections 102, 103, 104, 106, 107 or 108. It is Field's position that section 109 does not apply to unclaimed intangible personal property held by any other entity in the ordinary course of business. We disagree.

The cardinal rule governing statutory construction is that we must give effect to the intention of the legislature as expressed in the statute. (Young v. Mikva (1977), 66 Ill.2d 579, 6 Ill.Dec. 904, 363 N.E.2d 851; Mallin v. Najarian (1979), 76 Ill.App.3d 441, 32 Ill.Dec. 225, 395 N.E.2d 172.) The intention of the legislature should be sought primarily from the language employed. (Certain Taxpayers v. Sheahen (1970), 45 Ill.2d 75, 256 N.E.2d 758.) Where the language of the statute is clear and unambiguous, our only function is to enforce the law as enacted by the legislature. (Harvey Firemen's Association v. City of Harvey (1979), 75 Ill.2d 358, 27 Ill.Dec. 339, 389 N.E.2d 151.) Moreover, we are not authorized to depart from the plain language of a statute by reading in exceptions, limitations or conditions which conflict with the clearly expressed legislative intent. Certain Taxpayers v. Sheahen.

We believe the language of section 109 is clear, unambiguous and susceptible to only one logical interpretation. In order to be covered by this section the property must be: (1) intangible personal property; (2) not otherwise covered by the Act; (3) held or owing in this State in the ordinary course of the holder's business; and (4) unclaimed by the owner for a specified period. The legislature did not indicate that only holders of subject property under other sections of the Act would be covered by section 109. The section refers to property held in the holder's ordinary course of business. We take this requirement to mean that any entity holding unclaimed intangible personal property in the ordinary course of its business must comply with the Act.

Even were such a restrictive interpretation of section 109 as offered by Field available, we would feel compelled to reject it. In ascertaining legislative intent, we may look to the reason and necessity for the law, the evil to be remedied and the purpose to be obtained. (People ex rel. Moss v. Pate (1964), 30 Ill.2d 271, 195 N.E.2d 641.) We must consider the entire statutory scheme. (Mallin v. Najarian (1979), 76 Ill.App.3d 441, 32 Ill.Dec. 225, 395 N.E.2d 172.) Where two or more constructions may be placed upon a statute, we must select that construction which makes the statute both useful and logical. Yellow Equip. & Terminals, Inc. v. Lewis (1976), 35 Ill.App.3d 875, 342 N.E.2d 426; Stewart v. Amoco Oil Co. (1979), 72 Ill.App.3d 330, 27 Ill.Dec. 915, 389 N.E.2d 1323.

The interpretation of section 109 advanced by Field would be in conformity with neither the policy of the Act nor logic itself. The policy behind the Uniform Disposition of Unclaimed Property Act, upon which the Illinois Act is modeled, is described in the Commissioner's Prefatory Note as follows:

"The Uniform Act is custodial in nature this is to say, it does not result in the loss of the owner's property rights. The state takes custody and remains the custodian in perpetuity. Although the actual possibility of his presenting a claim in the distant future is not great, the owner retains his right of presenting his claim at any time, no matter how remote. State records will have to be kept on a permanent basis. In this respect the measure differs from the escheat type of statute, pursuant to which the right of the owner is foreclosed and the title to the property passes to the state. Not only does the custodial type of statute more adequately preserve the owner's interests, but, in addition, it makes possible a substantial simplification of procedure." Uniform Laws Annotated, Vol. 8, p. 74.

In addition to protecting the rights of unknown owners, the Uniform Act gives the state, rather than the holder of unclaimed property, the benefit of the use of such property. See Douglas Aircraft Co. v. Cranston (1962), 58 Cal.2d 462, 24 Cal.Rptr. 851, 374 P.2d 819.

We believe the legislature, in keeping with the obvious policy of the Act, intended by the adoption of section 109 to protect the owners of all intangible personal property held by anyone in the ordinary course of business.

In addition to being contrary to the overall policy of the Act, Field's interpretation would result in an illogical statutory scheme. For instance, business associations holding one isolated item of covered property as a fiduciary under section 107 would consequently be required to report all unclaimed intangible personal property held while a business association not holding any in a...