Peoples Store of Roseland v. McKibbin

• Decision Date: 10 March 1942
• Docket Number: Nos. 26200,26201.,s. 26200
• Citation: 379 Ill. 148,39 N.E.2d 995
• Parties: PEOPLES STORE OF ROSELAND et al. v. McKIBBIN, Director of Finance, et al.
• Court: Illinois Supreme Court

379 Ill. 148

39 N.E.2d 995

PEOPLES STORE OF ROSELAND et al.

v.McKIBBIN, Director of Finance, et al.

Nos. 26200, 26201.

Supreme Court of Illinois.

Jan. 20, 1942.

As Modified on Denial of rehearing March 10, 1942.

Appeal from Circuit Court, Cook County; Harry M. Fisher, judge.

Actions for injunction and accounting by the Peoples Store of Roseland and others, and by the Peoples Store of Roseland, the Cudahy Packing Company and others against George B. McKibbin, Director of Finance, and others, wherein others intervened. From adverse decrees, George B. McKibbin, Director of Finance, and others appeal.

Reversed and remanded, with directions.

George F. Barrett, Atty. Gen. (Albert E. Hallett, Jr., of Chicago, of counsel), for appellants.

John H. Gately, of Chicago, for appellees.

Hcnry S. Blum, Blum & Jacobson, Sidley, McPherson, Austin & Burgess, and Orr, Vail, Lewis & Orr, all of Chicago (Warren H. Orr, of Chicago, of counsel), for intervenors.

MURPHY, Chief Justice.

In December, 1939, the Peoples Store of Rcseland and Steele-Wedeles Company instituted a suit in the circuit court of Cook county against the State Director of Finance, State Treasurer and Attorney General to enjoin them from collection certain taxes which the director had ruled to be due from the plaintiffs under the Retailers' Occupation Tax Act. The prayer included a request for an accounting of taxes previously paid and for the issuance of credit certificates thereon. It pertained to the sale of tangible personal property such as meats, groceries, milks and edibles sold to hospitals, infirmaries, sanitaria, orphanages, old people's homes and other institutions of like character. Other firms engaged in the selling of such property to similar institutions were permitted to join as plaintiffs and others were granted leave to intervene. Some of the intervenors were permitted to come into the suit over the objection of the original plaintiffs but the ruling of the court on that point is not raised on this appeal.

The original complaint and amendments were all predicated on the theory that it was a class action brought in the interests of the plaintiffs individually and for and on behalf of all other individuals, firms and corporations in the State who were engaged in selling the same class of merchandise to the same character of institutions. The complaint also contained a prayer for an injunction restraining the other members of the class from instituting or prosecuting any suit which had for its purpose the same object as was included in the plaintiffs' pleadings. No persons were named as belonging to the class other than those who appeared as plaintiffs or intervenors, but a temporary injunction was served upon certain firms and corporations restraining them from instituting a suit in reference to their tax. Some of them filed special appearances limited to the filing of a motion to dissolve the temporary injunction. Some who had appeared in this manner later obtained leave of court to court to become additional parties plaintiff. Others adopted the complaint and amendments already on file, while some obtained leave to file an additional complaint. It is not necessary to analyze the pleadings thus filed or to determine whether the procedure adopted was authorized by statute or rule of court.

The defendant State officers filed an answer to plaintiffs' complaint. On July 18, 1940, a stipulation of facts was filed. On January 9, 1941, a decree was entered, in which it was found that the tax complained of was improperly assessed and the amounts which each plaintiff had paid were fixed by the decree. The temporary injunction issued against the State officers was made permanent and the treasurer was directed to issue warrants for the payment of the amounts due to each of the several plaintiffs. The intervenors who had appeared in the case by their respective attorneys were directed to pay the attorney for the plaintiff as attorney fees, twenty per cent of money or credit certificates paid back to them as reimbursement for taxes paid. The temporary injunction, restraining the unnamed members of the class from instituting suits to recover taxes involving the same questions of law and fact, was made permanent. A proviso, vague as to its purpose, appears to have modified the injunction to the extent of permitting unnamed members of the class to come into the same case and prove their claims and obtain relief in the same proceeding. The State officials appealed from this decree to this court and this case is No. 26200.

In December, 1939, the Peoples Store of Roseland, the Cudahy Packing Company, Steele-Wedeles, and Sprague-Warner & Company filed another suit in the same court against the same officials as the former suit. It questioned the right of the department to collect taxes from sales of meats, groceries, dairy products and other edibles to public school boards, high school boards, churches, religious organizations, colleges, universities and private schools. It was also filed as a class suit for and on behalf of all individuals, firms and corporations in the State engaged in the selling of such food products to such institutions. The pleadings, the admission of parties, appearance of intervenors, stipulation of facts and the decree are in substance the same as those contained in No. 26200. The State officials appealed to this court and this case is No. 26201. The two cases involve the same questions of law, and have been consolidated in this court for an opinion.

The claims for credits or refunds of all the parties are predicated upon the right of recovery granted by section 6 of the Retailers' Occupation Tax Act. (Ill.Rev.Stat. 1939, chap. 120, par. 445.) When these suits were started the act provided that, if it should appear that an amount of tax penalty or interest had been paid which was not due under the provision of the act, either as the result of a mistake of fact or an error of law, then such an amount should be credited against any tax due or to become due under the act from the person who made the erroneous payment or the amount should be refunded by the department. Laws of 1933, p. 927. This section has been amended but the foregoing provision has remained substantially the same. The amendments refer to limitations upon the right of recovery as was provided in the first enactment. In 1939, provision was made for a limitation upon the making of claims. Laws of 1939, p. 884. In 1941, Laws 1941, p. 1081, the section was again amended by adding a proviso.

The question presented is as to the effect of the later amendment upon the claims...