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Pettigrew v. National Accounts System

FEBRUARY 1, 1966.

ROBERT H. PETTIGREW, PLAINTIFF-APPELLANT,

v.

NATIONAL ACCOUNTS SYSTEM, INC., A DELAWARE CORPORATION, DEFENDANT-APPELLEE. NATIONAL ACCOUNTS SYSTEM, INC., A DELAWARE CORPORATION, AND AURORA ACCOUNTS SERVICE, INC., AN ILLINOIS CORPORATION, PLAINTIFFS-APPELLEES,

v.

LINCOLN COLLECTION SERVICE, INC., AN ILLINOIS CORPORATION, AND ROBERT H. PETTIGREW, AN INDIVIDUAL, DEFENDANTS-APPELLANTS.



Appeal from the Circuit Court for the Sixteenth Judicial Circuit, Kane County; the Hon. CASSIUS POUST, Judge, presiding. Reversed and remanded with directions.

MR. JUSTICE DAVIS DELIVERED THE OPINION OF THE COURT.

This appeal involves two cases which were consolidated, the first, a suit for declaratory judgment by Robert H. Pettigrew, herein called Pettigrew, against National Accounts System, Inc., herein called National; the second, a suit for injunction by National and Aurora Accounts Service, Inc., herein called Aurora Accounts, against Pettigrew and Lincoln Collection Service, Inc., herein called Lincoln.

The trial court heard the two cases, as consolidated, and rendered a decree against Pettigrew and in favor of National in the declaratory judgment action; and granted National and Aurora Accounts an injunction, permanent in nature, on their complaint, whereby Pettigrew and Lincoln were restrained from engaging in the credit service and debt collection business within a 25-mile radius of the City of Aurora, for a period of two years from the date of February 12, 1965.

Pettigrew and Lincoln have perfected this appeal from the foregoing decree urging, among other grounds, that they were denied procedural due process, as guaranteed by Section 1 of amendment XIV of the Constitution of the United States, and section 2 of article II of the Constitution of the State of Illinois, by the manner in which the trial court conducted the proceedings below. We agree with this contention.

In deciding this case, we had no desire or intent to enlarge our jurisdiction and were cognizant of sections 5b and 7 of article VI of the Illinois Constitution, and Rules 28-1 and 47 of the Supreme Court. (Ill Rev Stats 1965, c 110, pars 101.28-1 and 101.47.) Also, we believed that the constitutional principles involved were well settled.

Our decision required a factual analysis of the procedures followed in the case and a construction of the terms of the Civil Practice Act and the Rules of the Supreme Court in their application to such facts, in the light of the well settled constitutional principles herein recited — principles which are no longer fairly debatable and, consequently, not susceptible of being parlayed into substantial constitutional questions. (See: The People v. Blanchett, 33 Ill.2d 527, 212 N.E.2d 97 (1965); First Nat. Bank & Trust Co. v. Evanston, 30 Ill.2d 479, 483-486, 197 N.E.2d 705 (1964); People v. Valentine, 60 Ill. App.2d 339, 344-349, 208 N.E.2d 595 (1st Dist 1965).)

With due deference to the jurisdiction of the Supreme Court in cases involving constitutional questions — yet firm in our belief that this court, of necessity, has jurisdiction over certain and limited aspects thereof — we decided this case, in the above manner, on the threshold issue of procedural due process.

Pettigrew filed his complaint, seeking a declaratory judgment, on April 9, 1965. Essentially, the complaint alleged that he was hired in 1957 by National to manage its Aurora collection agency office; that in 1964, National forwarded to him a pad of employment agreement forms for his signature and that of the other employees of the office; and that he signed such an agreement, bearing the date August 31, 1964, without any additional salary or other consideration. The agreement provided in part:

"That Employee will not directly or indirectly, as principal, agent, employee, or in any other capacity, for the term of two (2) years after the date of termination of his employment hereunder, enter or engage in any branch of the business relating to the collection of debts, demands, accounts, estates or claims of any kind, or in any other business or activity which is in any respect, or may be considered by Employer to be competitive with the business of Employer within a radius of fifty (50) miles of any of the places of business of Employer or within a radius of fifty (50) miles of any of the offices of any firm or corporation owned or controlled by Employer."

It also provided that either party could terminate the employment upon two weeks written notice, and that the employer could also terminate the agreement at any time without notice for cause.

The complaint further alleged that National fired Pettigrew in February, 1965, without explanation; that he returned to the collection business to earn a livelihood; that National notified Pettigrew to cease engaging in the collection business; and that he, therefore, sought a judgment declaring the rights and duties of the parties under the employment contract dated August 31, 1964. Summons was served upon National in the declaratory judgment action on April 9, 1965.

On April 12, 1965, National and Aurora Accounts (which we shall treat as identical for our purpose here) filed a suit based upon the same contract and two preceding ones, alleging that Pettigrew had been branch manager of the Aurora office since 1957; that he had thus acquired knowledge of a confidential nature; that he had contacted a substantial number of customers of plaintiff; that after the termination of his employment, he caused Lincoln to be incorporated and entered into the collection business in competition with National, contrary to the employment agreements; and that National was entitled to a judgment for $50,000 for damages already sustained, a temporary injunction pending final hearing, and an injunction, permanent in nature, prohibiting further competition from Pettigrew and Lincoln within a 50-mile radius of Aurora for a period of two years from the date of termination of the employment. This complaint was served upon Pettigrew and Lincoln on April 13, 1965.

The parties then appeared before the court on April 20, 1965, apparently on a notice of National and Aurora Accounts for hearing for a temporary injunction. At this time the cases were consolidated by agreement, and the court advised the parties that the consolidated cases would be continued until the following morning, at which time the court would start hearing proof. Counsel for Pettigrew and Lincoln objected, stating that the only matter before the court was a motion for temporary injunction, and Pettigrew further asserted that he had not yet had an opportunity to file a motion, an answer or other pleading to the complaint for injunction.

On the following morning — twelve days after suit was commenced and summons served in the declaratory judgment action, and eight days after summons was served in the injunction action — the court proceeded to hear proof. At this time, National filed an answer to the declaratory judgment complaint, and a lengthy affidavit setting forth matters in support of its motion for ...


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