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People Ex Rel. Lindberg v. Mem. Consultants

OPINION FILED JULY 29, 1977.

THE PEOPLE EX REL. GEORGE W. LINDBERG, COMPTROLLER, PLAINTIFF-APPELLANT,

v.

MEMORIAL CONSULTANTS, INC., DEFENDANT-APPELLEE.



APPEAL from the Circuit Court of Peoria County; the Hon. CHARLES W. IBEN, Judge, presiding.

MR. PRESIDING JUSTICE STENGEL DELIVERED THE OPINION OF THE COURT:

Rehearing denied August 30, 1977.

George Lindberg as Comptroller of the State of Illinois brought this action to enforce the licensing provisions of the funeral or burial funds act (Ill. Rev. Stat. 1975, ch. 111 1/2, par. 73.103) against Memorial Consultants, Inc., an Illinois corporation doing business in this state. The act provides that persons who sell funeral merchandise under a prepayment plan must hold the proceeds of sale in trust and must be licensed by the Comptroller. This enforcement action sought an injunction to prevent defendant from doing business without a license and also sought an accounting of all sums received under prepaid contracts since 1955. Defendant filed a general denial and an affirmative defense alleging that the statute violates defendant's constitutional rights because it is confiscatory.

At an early stage of the proceedings the Illinois State Funeral Directors Association was permitted to intervene as a party plaintiff. Defendant filed a countercomplaint claiming in count I that the members of the association have combined to eliminate competition and to restrain retail trade of burial vaults in violation of the Illinois Antitrust Act (Ill. Rev. Stat. 1975, ch. 38, par. 60-3(2)). Count II of the countercomplaint asserted a cause of action under 42 U.S.C. § 1983 for deprivation of constitutional rights resulting from enforcement of the funeral or burial funds act and prayed for an injunction restraining enforcement of the act. The intervenors then withdrew from the suit, and the trial court dismissed count I of the countercomplaint, and also dismissed count II as to all counterdefendants except George Lindberg.

The cause was submitted to the court upon a stipulation of facts, and the Circuit Court of Peoria County entered judgment for defendant. Lindberg then filed this appeal.

Section 1 of the funeral or burial funds act (Ill. Rev. Stat. 1975, ch. 111 1/2, par. 73.101) provides as follows:

"Any payment of money made to any person, partnership, association or corporation upon any agreement or contract, * * * which has for a purpose the furnishing or performance of funeral services, or the furnishing or delivery of any personal property, merchandise, or services of any nature in connection with the final disposition of a dead human body, for future use at a time determinable by the death of the person or persons whose body or bodies are to be so disposed of, shall be held to be trust funds, and the person, partnership, association or corporation receiving said payments is hereby declared to be a trustee thereof."

Section 2 of the act requires the trust funds to be deposited in the name of the trustee, as trustee, within 30 days after receipt, and section 3 requires such trustees to obtain a State license from the Comptroller.

Defendant is engaged in the business of selling burial vaults. During 1972-74, defendant entered into approximately 9,000 contracts for the sale of vaults with gross receipts of $1,250,000, not all of which represented vault sales. The contracts provide for monthly installment payments of the purchase price and also provide that within 60 days after payment of the full purchase price, upon the purchaser's request, defendant will deliver the merchandise purchased subject to the following conditions:

"(a) The furnishing of or the delivery date for the merchandise and/or services designated as purchased is in no way dependent upon YOUR death or upon the death of any other person or persons.

(b) YOU will within sixty (60) days after payment in full request delivery of the merchandise and services designated as purchased in the "Declarations" and [defendant] agrees that within a reasonable time following receipt of said request it will deliver to YOU said merchandise and services anywhere within the area designated in the "Declarations" at no additional cost to YOU.

(c) YOU may use any or all of the merchandise and services purchased for any purpose whatsoever and for the benefit of any person or persons YOU may designate."

The contract also provides that, if the purchaser does not request delivery within 60 days following payment in full, defendant will hold the present-day cost of the merchandise in the purchaser's name. If the cost of merchandise has increased by the date of delivery, the purchaser must pay the additional cost, and if the cost has declined, the purchaser will receive a rebate.

Plaintiff Lindberg raises two issues on appeal. First, do defendant's contracts come within the purview of the statute, and second, is the statute ...


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