{
  "id": 3228570,
  "name": "JAMES B. CRABTREE et al., Appellants, v. THE ILLINOIS DEPARTMENT OF AGRICULTURE, Division of Agricultural Industry Regulation, Bureau of Warehouses, et al., Appellees",
  "name_abbreviation": "Crabtree v. Illinois Department of Agriculture",
  "decision_date": "1989-05-24",
  "docket_number": "No. 67396",
  "first_page": "510",
  "last_page": "524",
  "citations": [
    {
      "type": "official",
      "cite": "128 Ill. 2d 510"
    }
  ],
  "court": {
    "name_abbreviation": "Ill.",
    "id": 8772,
    "name": "Illinois Supreme Court"
  },
  "jurisdiction": {
    "id": 29,
    "name_long": "Illinois",
    "name": "Ill."
  },
  "cites_to": [
    {
      "cite": "117 Ill. 2d 120",
      "category": "reporters:state",
      "reporter": "Ill. 2d",
      "case_ids": [
        5545200
      ],
      "pin_cites": [
        {
          "page": "145"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/ill-2d/117/0120-01"
      ]
    },
    {
      "cite": "88 Ill. 2d 81",
      "category": "reporters:state",
      "reporter": "Ill. 2d",
      "case_ids": [
        3082489
      ],
      "weight": 2,
      "pin_cites": [
        {
          "page": "85"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/ill-2d/88/0081-01"
      ]
    },
    {
      "cite": "124 Ill. 2d 218",
      "category": "reporters:state",
      "reporter": "Ill. 2d",
      "case_ids": [
        3218246
      ],
      "pin_cites": [
        {
          "page": "221"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/ill-2d/124/0218-01"
      ]
    },
    {
      "cite": "144 Ill. App. 3d 575",
      "category": "reporters:state",
      "reporter": "Ill. App. 3d",
      "case_ids": [
        3499334
      ],
      "pin_cites": [
        {
          "page": "579"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/ill-app-3d/144/0575-01"
      ]
    },
    {
      "cite": "170 Ill. App. 3d 387",
      "category": "reporters:state",
      "reporter": "Ill. App. 3d",
      "case_ids": [
        3586475
      ],
      "weight": 7,
      "pin_cites": [
        {
          "page": "390"
        },
        {
          "page": "394-96"
        },
        {
          "page": "393, 396"
        },
        {
          "page": "396-97"
        },
        {
          "page": "397"
        }
      ],
      "opinion_index": 0,
      "case_paths": [
        "/ill-app-3d/170/0387-01"
      ]
    }
  ],
  "analysis": {
    "cardinality": 933,
    "char_count": 25129,
    "ocr_confidence": 0.769,
    "pagerank": {
      "raw": 1.6745350249953938e-07,
      "percentile": 0.6964836559969326
    },
    "sha256": "7b356753bcea102115785f67605f707238e394cf4ecea48d2d092a82936dc291",
    "simhash": "1:8ba649efe080b419",
    "word_count": 4026
  },
  "last_updated": "2023-07-14T19:54:46.843720+00:00",
  "provenance": {
    "date_added": "2019-08-29",
    "source": "Harvard",
    "batch": "2018"
  },
  "casebody": {
    "judges": [],
    "parties": [
      "JAMES B. CRABTREE et al., Appellants, v. THE ILLINOIS DEPARTMENT OF AGRICULTURE, Division of Agricultural Industry Regulation, Bureau of Warehouses, et al., Appellees."
    ],
    "opinions": [
      {
        "text": "JUSTICE CALVO\ndelivered the opinion of the court:\nPlaintiffs, James B. Crabtree and Douglas Crabtree, filed a complaint for administrative review in the circuit court of Macoupin County after the Director of Agriculture found they were not entitled to recovery on claims filed pursuant to the Illinois Grain Insurance Act (Ill. Rev. Stat. 1983, ch. 114, par. 701 et seq.). The circuit court upheld the Director\u2019s decision, and the appellate court affirmed the judgment of the circuit court (170 Ill. App. 3d 387). We granted the plaintiffs\u2019 petition for leave to appeal under Supreme Court Rule 315 (107 Ill. 2d R. 315).\nThe claims filed by the Crabtrees arose from the economic failure of the Atwater Grain Company (Atwater) and were based on two warehouse receipts. The receipt submitted by James Crabtree was issued by Atwater on January 4, 1985, for 50,000 bushels of com. The face of the receipt states: \u201cReceived for account of James B. Crabtree.\u201d No storage charges were listed. James Crab-tree testified that the receipt represented 50,000 bushels of com he purchased from Atwater for $140,000. The receipt submitted by Douglas Crabtree was issued by Atwater on January 7, 1985, for 25,000 bushels of com. It recites: \u201cReceived for account of Douglas Crabtree (Collateral Receipt).\u201d Douglas Crabtree testified he had received the receipt as collateral for a loan of $100,000. Payment of the foregoing sums of money to Atwater is not in dispute.\nThe hearing officer denied James Crabtree\u2019s claim on the Grain Insurance Fund, holding that Crabtree had only a \u201cgeneral creditor claim,\u201d unrelated to a grain transaction and payable only after satisfaction of \u201cgrain claims.\u201d Officer Crews found that James Crabtree\u2019s intent was not to purchase Atwater\u2019s grain, but to \u201cfinance the elevator operation.\u201d Apparently this finding was based on Crabtree\u2019s testimony that he bought the grain to help alleviate Atwater\u2019s cash-flow problems and thereby keep Atwater in the community. Having found that the transaction was in reality a loan, Officer Crews determined that James Crabtree\u2019s warehouse receipt was not duly issued to reflect the true nature of the transaction. Officer Crews also found Douglas Crabtree\u2019s warehouse receipt \u201cimproperly issued\u201d and relegated both James and Douglas Crabtree to the subordinate status of general creditors.\nThe Crabtrees filed a petition for reconsideration of the hearing officer\u2019s decision. On June 18, 1985, the Director of Agriculture affirmed the order of the hearing officer. In upholding the denial of James Crabtree\u2019s claim on the Grain Insurance Fund, the Director concurred that Crabtree\u2019s transaction with Atwater was in fact a loan, finding dispositive the fact that Crabtree was not assessed storage charges for the storage of the grain and testimony that Crabtree\u2019s motivation for purchasing the grain \u201cwas to provide money to Atwater Grain Company for operating expenses.\u201d The Director determined, \u201cboth James and Douglas Crabtree\u2019s claims arose from making loans to Atwater Grain Company and taking warehouse receipts as collateral.\u201d Although the Director acknowledged that lenders may hold warehouse receipts as collateral, he ruled that the manner of issuance \u201cis of paramount importance.\u201d The Director\u2019s response to the Crabtrees\u2019 petition for reconsideration states in pertinent part:\n\u201cParagraph 214.7a of the Illinois Public Grain Warehouse and Warehouse Receipts Act [Ill. Rev. Stat. 1983, ch. 114, par. 214.1 et seq.] *** states that a warehouseman may issue a warehouse receipt for grain owned by himself and dispose of the title or interest in such grain through the medium of such receipt. It does not set forth the manner in which this is done, but logic dictates that a collateral receipt must reflect that the warehouseman is the owner of the grain being used as collateral. In the matter under consideration, this is not the case. The warehouse receipts issued to the Crabtrees show that the grain covered by these receipts was received for their account when, in fact, they should show Atwater Grain Co. the owner of the grain utilized as collateral. Therefore, the warehouse receipts issued to James and Douglas Crabtree are invalid and do not entitle them to treatment as claimants under the Illinois Grain Insurance Act.\u201d\nThe Crabtrees sought judicial review of the Director\u2019s decision in the circuit court pursuant to sections 3 \u2014 103 and 3 \u2014 104 of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, pars. 3-103, 3-104).\nIn its brief in support of its administrative ruling, the Department of Agriculture interjected \u201cevidence\u201d not presented during the administrative hearing. The \u201cevidence\u201d was purportedly discovered after the hearings before Officer Crews. The Department claimed that the Crabtrees had \u201cintimate knowledge\u201d of Atwater\u2019s financial affairs, that they had admitted Atwater had no company-owned grain at the time the warehouse receipts were issued, and that Douglas Crabtree was not the holder of the warehouse receipt on which his claim was based, having endorsed the receipt to the Carlinville National Bank. The Department alleged that Douglas Crab-tree presented only a copy of the front of the receipt as evidence. The Department appended to its brief the affidavit of a warehouse examiner who had reconstructed Atwater\u2019s daily position records for December of 1984 and January of 1985 and determined that Atwater had issued warehouse receipts for company-owned com in excess of the supply on hand. Also appended to the Department\u2019s brief were the daily position records of Atwater, a copy of the reverse side of Douglas Crabtree\u2019s warehouse receipt showing endorsement to the Carlinvill\u00e9 National Bank, and the affidavit of the bank\u2019s vice-president attesting that Douglas Crabtree had endorsed the receipt as security for a loan.\nThe Crabtrees moved to strike portions of the Department\u2019s brief wherein the Department referred to facts not of record in the administrative proceedings and requested remand for the presentation of additional evidence in the event the circuit court reversed the administrative decision. The Crabtrees argued, based on language in section 3 \u2014 111(aX7) of the Code of Civil Procedure (Ill. Rev. Stat. 1985, ch. 110, par. 3 \u2014 111(aX7)), that remand to consider additional evidence bearing on the circumstances surrounding negotiation of the warehouse receipts was unwarranted where the Department had made no showing that such evidence was \u201cunobtainable through the exercise of reasonable diligence at the time of the original administrative hearing.\u201d\nBy order entered December 3, 1986, the circuit court granted the Crabtrees\u2019 motion to strike evidence not contained in the administrative record and arguments not raised during the administrative hearing. The court found, however, that the decision of the Director of Agriculture, denying the Crabtrees\u2019 petition for reconsideration, was not contrary to the manifest weight of the evidence.\nThe appellate court, one justice dissenting, affirmed the judgment of the circuit court. (170 Ill. App. 3d 387.) A unanimous appellate panel granted the Crabtrees\u2019 motion to strike references in the Department\u2019s brief to the reverse side of Douglas Crabtree\u2019s warehouse receipt and records concerning Atwater\u2019s ownership of grain. (170 Ill. App. 3d at 390.) The court declined to consider the Department\u2019s argument that the Crabtrees\u2019 receipts were not \u201cduly negotiated\u201d within the meaning of section 7 \u2014 501(4) of the Uniform Commercial Code (UCC) (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 501(4)) because the Department had not made due negotiation an issue in the agency hearing and the record therefore lacked an adequate factual basis to justify considering the subject on appeal. (170 111. App. 3d at 392.) Further, the panel agreed that the Director\u2019s finding, that the transactions at issue were loans, was not contrary to the manifest weight of the evidence. The panel disagreed, however, on the question of the validity of the Crabtrees\u2019 receipts.\nThe majority, citing section 7 \u2014 202(2)(h) of the UCC (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 202(2)(h)) and section 17.01 of the Public Grain Warehouse and Warehouse Receipts Act (Public Grain Act) (Ill. Rev. Stat. 1983, ch. 114, par. 214.17), held the receipts invalid. (170 Ill. App. 3d at 394-96.) Section 17.01 of the Public Grain Act provides that public grain warehouses shall issue \u201conly receipts as approved by the Department [of Agriculture] and no other form of receipt whatsoever ***.\u201d (Ill. Rev. Stat. 1983, ch. 114, par. 214.17.) Section 3(2) of the Public Grain Act, not specifically mentioned by the majority, states that the Department shall \u201c[prescribe the kind and form of warehouse receipts which shall conform to the \u2018Uniform Commercial Code.\u2019 \u201d (Ill. Rev. Stat. 1983, ch. 114, par. 214.3(2).) Section 7 \u2014 202(2)(h) of the UCC provides:\n\u201c(2) Unless a warehouse receipt embodies within its written or printed terms each of the following, the warehouseman is liable for damages caused by the omission to a person injured thereby:\n(h) if the receipt is issued for goods of which the warehouseman is owner, either solely or jointly or in common with others, the fact of such ownership \u2022***.\u201d (Ill. Rev. Stat. 1983, ch. 26, par. 7-202(2)(h).)\nThe majority, requiring \u201cspecific compliance with statutory provisions,\u201d determined that the Crabtrees\u2019 receipts were invalid because they failed to embody the ownership of Atwater within the terms of the receipt. 170 Ill. App. 3d at 393, 396.\nJustice Green, dissenting, placed a different interpretation on section 7 \u2014 202 of the UCC. Noting that section 7 \u2014 202(1) specifically states a warehouse receipt \u201cneed not be in any particular form\u201d (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 202(1)), and that section 7 \u2014 202(2) places responsibility for any imperfections in the receipt on the issuer (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 202(2)), Justice Green concluded that the receipts in question are not invalid because Atwater\u2019s name does not appear thereon. (170 Ill. App. 3d at 396-97.) In further support of his position, Justice Green observed that section 7 \u2014 401(a) of the UCC provides \u201cthe \u2018obligations imposed by [article 7] on an issuer apply to a document of title regardless of the fact that\u2019 the document does not \u2018comply with the requirements of [article 7]\u2019 (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 401(a)).\u201d (170 Ill. App. 3d at 397.) As there was no evidence of fraud in the record, and the Director made no finding that the receipts were issued for nonexistent grain, Justice Green concluded that the Crabtrees\u2019 claims should have been allowed.\nOur analysis in this case begins with the appropriate scope of review. Section 3 \u2014 110 of the Code of Civil Procedure (the Code) (Ill. Rev. Stat. 1985, ch. 110, par. 3\u2014 110) provides in pertinent part that \u201c[n]o new or additional evidence in support of or opposition to any finding, order, determination or decision of the administrative agency shall be heard by the court.\u201d In reviewing an administrative decision, courts are confined to consideration of evidence submitted during the administrative hearing and may not entertain additional evidence or conduct a hearing de novo. (Popoff v. Department of Labor (1986), 144 Ill. App. 3d 575, 579.) The additional evidence that the Department attempted to introduce before the circuit court was therefore properly excluded. Moreover, the appellate court was correct in its determination that remand, absent reversal, pursuant to section 3 \u2014 lll(aX7) of the Code (Ill. Rev. Stat. 1985, ch. 110, par. 3 \u2014 lll(aX7)) was inappropriate because, from the record, it appears the Department could, by the exercise of reasonable diligence, have obtained the evidence in question in time to submit it during the administrative proceedings.\nOn the merits, the first issue we will address is whether the Director\u2019s finding that James Crabtree\u2019s transaction with Atwater was a loan is against the manifest weight of the evidence. Pursuant to the following reasoning, we hold the Director\u2019s finding to be contrary to the manifest weight of the evidence.\nBased upon Crabtree\u2019s testimony that his purchase of com was motivated by a desire to help Atwater financially and keep it in the community, and the fact that Atwater charged Crabtree no storage charges following the transaction, the Director concluded the transaction was a loan rather than a purchase of corn, as Crabtree had testified. Crabtree explained in his testimony that no charges for storage were assessed because, under the terms of the agreement, Atwater was to deliver the grain to market at its convenience after the purchase. No other evidence was presented.\nAlthough findings of fact by an administrative agency are considered to be prima facie true and correct (Coleman v. Illinois Racing Board (1988), 124 Ill. 2d 218, 221), a finder of fact cannot arbitrarily or capriciously reject the testimony of an unimpeached witness (People ex rel. Brown v. Baker (1981), 88 Ill. 2d 81) where the testimony of the witness is \u201cneither contradicted, either by positive testimony or by circumstances, nor inherently improbable\u201d (Baker, 88 Ill. 2d at 85). Notwithstanding the deference we generally accord an agency\u2019s findings of fact, those factual findings must still be based on the evidence. People ex rel. Hartigan v. Illinois Commerce Comm\u2019n (1987), 117 Ill. 2d 120, 145.\nWe see nothing inherently unreasonable in Atwater\u2019s failure to assess storage charges after James Crabtree\u2019s purchase, if, as Crabtree testified, the grain was intended for delivery to market forthwith; nor do we believe Crabtree\u2019s desire to help Atwater \u2014 and thereby keep it in the community \u2014 should necessarily transform a purchase into a loan.\nOur review of general contract law fails to disclose \u201cmotivation\u201d as a relevant factor in characterizing the nature of a transaction, barring some evidence of illegality or violation of public policy. The character of a transaction is determined by the \u201cintention\u201d of the parties, which is not synonymous with their purposes or motives. (17A C.J.S. Contracts \u00a7295a (1963).) People are motivated to purchase things for myriad reasons, ranging from altruism to avarice; however, the transactions are nonetheless sales, not loans. In general, a \u201cloan\u201d is defined as delivery by one party to another of a sum of money upon agreement, express or implied, to repay it with or without interest. (Black\u2019s Law Dictionary 844 (5th ed. 1979).) There is no evidence in this record indicating that repayment was intended. In fact, there is nothing to contradict James Crabtree\u2019s characterization of the transaction as a purchase. The Director\u2019s finding is contrary to the evidence.\nWe will now consider the Department\u2019s ruling denying the Crabtrees recovery from the Grain Insurance Fund because the Crabtrees\u2019 warehouse receipts did not meet the Department\u2019s standards. According to the Department, \u201cformal standards for eligible receipts\u201d must be imposed to prevent fraud and abuse of the guaranteed source of reimbursement provided by the Grain Insurance Act. While we share the Department\u2019s concern, we are not persuaded that the Department\u2019s exacting standards for scrutinizing warehouse receipts will prevent abuse of the system. Moreover, it does not appear that the relevant statutory provisions require the \u201cstrict construction\u201d the Department has adopted.\nThe Illinois Grain Insurance Act was enacted, and the Grain Insurance Fund established,\n\u201cto protect grain producers in the event of the financial failure of a grain dealer or grain warehouseman and to ensure the existence of an adequate fund so that grain producers and claimants may be compensated for losses occasioned by the failure of a grain dealer or warehouseman.\u201d (Ill. Rev. Stat. 1983, ch. 114, par. 701.)\nThe Act defines \u201cclaimant\u201d broadly to include (1) any producer or person, including a lender, possessing warehouse receipts covering grain owned or stored by the grain dealer or warehouseman; (2) any person with written evidence of ownership, other than warehouse receipts, disclosing a storage obligation of the grain dealer or warehouseman; (3) any person who has lent money to a dealer or warehouseman and was to receive a warehouse receipt as security for that loan, but the dealer or warehouseman failed within 21 days after receiving the loan monies and no warehouse receipt was issued; (4) any person who has surrendered a warehouse receipt as part of a grain sale transaction and, because of a dealer or warehouse failure within 21 days thereafter, the person surrendering the receipt did not get paid therefor; or (5) any producer who possesses written evidence of a grain sale to a failed grain dealer or warehouseman, but was not fully paid therefor and is unable to secure satisfaction of financial obligations due pursuant to certain other statutory enactments regulating grain dealers and warehousemen. Ill. Rev. Stat. 1983, ch. 114, par. 702.\nThe Act guarantees claimants, who have incurred financial losses due to a failure of a grain dealer, compensation for 85% of a valid claim, to a maximum of $100,000, with monies from the Grain Insurance Fund. To the maximum extent that funds are available, the remaining balances of such claims are to be paid from the assets or other security of the failed grain dealer; however, claimants who have surrendered warehouse receipts for payment \u201cshall\u201d be compensated for 100% of a valid claim. (Ill. Rev. Stat. 1983, ch. 114, par. 708(a).) The Act provides that a claimant who has incurred a financial loss due to a failure of a grain warehouseman \u201cshall\u201d be entitied to be compensated for 100% of a valid claim. Ill. Rev. Stat. 1983, ch. 114, par. 708(b).\nThe Act empowers the Director of Agriculture to determine valid claims and the amount of such claims (Ill. Rev. Stat. 1985, ch. 114, par. 709(a)) and defines a \u201cvalid claim\u201d as one \u201carising from a failure of a grain dealer or warehouseman *** adjudicated valid by the Department *** and in accordance with Section 40.23 of The Civil Administrative Code of Illinois.\u201d (Ill. Rev. Stat. 1985, ch. 114, par. 702.) Section 40.23 of the Civil Administrative Code (Ill. Rev. Stat. 1985, ch. 127, par. 40.23) directs the Department of Agriculture to \u201cpromulgate and file procedural rules and regulations to be followed concerning *** the holding of administrative hearings to identify and verify claimants.\u201d Section 3.190(a) of title 8 of the Illinois Administrative Code provides that \u201c[c]laims to be valid against a licensee\u2019s or registrant\u2019s assets held by the Trustee shall be defined as bona fide obligations covered by enabling statute and/or Section 40.23 of The Civil Administrative Code of Illinois ***.\u201d (8 Ill. Adm. Code \u00a73.190(a) (1985).) Section 40.23 of the Civil Administrative Code also provides specific guidance regarding the validity of claims based on loans secured by grain as collateral. In defining \u201cgrain assets,\u201d this paragraph provides that property \u201cshall not be deemed to be encumbered unless the encumbrance results from good and valuable consideration advanced by any secured party on a bona fide basis.\u201d (Ill. Rev. Stat. 1985, ch. 127, par. 40.23.) Identical language can be found in the definition of \u201cgrain assets\u201d in the Grain Insurance Act. (Ill. Rev. Stat. 1985, ch. 114, par. 702.) Thus, in addition to presentation of a warehouse receipt, the underlying transaction must be \u201cbona fide,\u201d that is, \u201cin good faith\u201d and \u201cwithout deceit or fraud\u201d (Black\u2019s Law Dictionary 160 (5th ed. 1979)), before a valid claim can be established.\nWe turn now to consider the requisites of a warehouse receipt sufficient to support a valid claim under the statute. The Grain Insurance Act\u2019s definition of \u201cwarehouse receipt\u201d refers to the Public Grain Act \u201cin accordance with the Uniform Commercial Code.\u201d (Ill. Rev. Stat. 1983, ch. 114, par. 702.) The Public Grain Act, which was enacted to regulate public grain warehouses and warehouse receipts, provides that public grain warehouses licensed in Illinois shall issue \u201conly receipts as approved by the Department and no other form whatsoever.\u201d (Ill. Rev. Stat. 1983, ch. 114, par. 214.17.) The Act further directs the Department to \u201c[prescribe the kind and form of warehouse receipts which shall conform to the \u2018Uniform Commercial Code\u2019, Article 7.\u201d (Ill. Rev. Stat. 1983, ch. 114, par. 214.3(2).) The Crabtrees\u2019 receipts appear to be on standard forms, presumably approved by the Department.\nThe question, then, is whether the Crabtrees\u2019 warehouse receipts conform to the UCC, and if they do not, whether the Crabtrees should be denied recovery from the Grain Insurance Fund because of the receipts\u2019 failure to conform. As already stated in our discussion of Justice Green\u2019s dissent, the UCC requires no particular form for a warehouse receipt. (Ill. Rev. Stat. 1983, ch. 26, par. 7\u2014 202(1).) It does, however, hold the warehouseman liable for damages where certain elements are omitted from the receipt and a person is injured thereby. (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 202(2).) Where a receipt is issued for goods of which the warehouseman is owner, the fact of such ownership is an element which must be included in the receipt. (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 202(2)(h).) In addition to the liability imposed upon an issuer for failure to include an element in section 7 \u2014 202 in the warehouse receipt, the UCC provides:\n\u201cThe obligations imposed by this Article on an issuer apply to a document of title regardless of the fact that\n(a) the document may not comply with the requirements of this Article or of any other law or regulation regarding its issue, form or content ***.\u201d (Ill. Rev. Stat. 1985, ch. 26, par. 7 \u2014 401(a).)\nWe believe, having carefully examined the statutory provisions cited by the parties, that the Crabtrees\u2019 warehouse receipts were sufficient to evidence grain transactions involving a purchase of com, and a loan secured by com as collateral.\nAll of the statutory provisions cited above relate to Atwater as the issuer of the warehouse receipts. The UCC provisions exhibit an intent to protect persons injured by the issuance of irregular warehouse receipts. The Grain Insurance Act is intended to protect grain producers and claimants who sustain losses because of grain warehouse failures. Nowhere in any of these provisions is there evidence that the legislature intended to penalize a farmer who took a warehouse receipt in good faith and incurred a financial loss due to the warehouse\u2019s failure.\nWe believe the Department\u2019s procedure in this case defeats the purpose for which the fund was established and itself presents a possibility for abuse. The Department\u2019s approach leaves the financial fate of farmers, who may lack legal sophistication, in the hands of the warehouse-men issuing the receipts. Moreover, it is inconceivable that the Department could undertake an intelligent and informed adjudication of claims before it had even finished its examination of Atwater\u2019s records. The summary proceeding employed here, which exalted form over substance, did not begin to address what we consider to be the most important element of a \u201cvalid claim\u201d under the Grain Insurance Act \u2014 a bona fide transaction, conducted in good faith \u2014 what is referred to in the UCC as \u201cdue negotiation.\u201d (Ill. Rev. Stat. 1983, ch. 26, par. 7 \u2014 501(4).) Without such an inquiry, collusion between the issuer and issuee of \u201cfacially valid\u201d warehouse receipts could deplete the Grain Insurance Fund in short order. Irregularities in warehouse receipts should indeed be subject to careful scrutiny and funds should not be released to the holders thereof until a thorough inquiry is undertaken into the circumstances of the transaction, but we believe the technical standard applied by the Department here, while it does preserve the fund, defeats the purpose of the statute.\nFor the reasons stated, we reverse the judgments of the circuit and appellate courts. Because we reverse the decision of the Department denying the Crabtrees\u2019 claims based upon irregularities in their warehouse receipts, and because we find the criteria applied by the Department to determine a valid claim incomplete, we remand the cause to the Department pursuant to section 3 \u2014 111(aX6) of the Code of Civil Procedure (Ill. Rev. Stat. 1987, ch. 110, par. 3 \u2014 111(aX6) (107 Ill. 2d R. 366(aX5)) and direct the Department to hold further hearings to determine whether the transactions in question were bona fide.\nAppellate court reversed; circuit court reversed; cause remanded with directions.",
        "type": "majority",
        "author": "JUSTICE CALVO"
      }
    ],
    "attorneys": [
      "Evan H. Johnson and Frederic L. Kenney, of Armstrong, Winters, Prince, Featherstun & Johnson, of Decatur, for appellants.",
      "Neil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and Rosalyn B. Kaplan, Assistant Attorney General, of Chicago, of counsel), for appellees."
    ],
    "corrections": "",
    "head_matter": "(No. 67396.\nJAMES B. CRABTREE et al., Appellants, v. THE ILLINOIS DEPARTMENT OF AGRICULTURE, Division of Agricultural Industry Regulation, Bureau of Warehouses, et al., Appellees.\nOpinion filed May 24, 1989.\nEvan H. Johnson and Frederic L. Kenney, of Armstrong, Winters, Prince, Featherstun & Johnson, of Decatur, for appellants.\nNeil F. Hartigan, Attorney General, of Springfield (Robert J. Ruiz, Solicitor General, and Rosalyn B. Kaplan, Assistant Attorney General, of Chicago, of counsel), for appellees."
  },
  "file_name": "0510-01",
  "first_page_order": 520,
  "last_page_order": 534
}