Benzoline Motor Fuel Co. v. Bollinger

• Decision Date: 13 November 1933
• Docket Number: No. 21784.,21784.
• Citation: 353 Ill. 600,187 N.E. 657
• Parties: BENZOLINE MOTOR FUEL CO. v. BOLLINGER, Director of Finance.
• Court: Illinois Supreme Court

353 Ill. 600

187 N.E. 657

BENZOLINE MOTOR FUEL CO.

v.BOLLINGER, Director of Finance.

No. 21784.

Supreme Court of Illinois.

June 22, 1933.

As Modified on Denial of Rehearing Oct. 6, 1933.

Dissenting Opinion Nov. 13, 1933.

Error to Circuit Court, Sangamon County; R. W. Griffith, Judge.

Suit by the Benzoline Motor Fuel Company against A. C. Bollinger, Director of Finance. To review a decree dismissing the bill, complainant brings error.

Reversed, and remanded with directions.

STONE and DE YOUNG, JJ., dissenting.

George F. Barrett and Charles V. Barrett, both of Chicago (Burrell J. Cramer, of Chicago, of counsel), for plaintiff in error.

Otto Kerner, Atty. Gen., and Montgomery S. Winning, of Springfield, for defendant in error.

PER CURIAM.

The Benzoline Motor Fuel Company, an Illinois corporation, as complainant, filed a bill in the circuit court of Sangamon county to restrain the defendant, Albert C. Bollinger, then director of finance, from paying into the state treasury the motor fuel tax paid by complainant for the month of January, 1928, amounting to $24,268.90. This tax was paid under the provisions of the Motor Fuel Tax Act of 1927 (Smith-Hurd Rev. St. 1927, c. 120, § 417 et seq.), which was held to be unconstitutional by this court on February 24, 1928, in the case of Chicago Motor Club v. Kinney, 329, Ill. 120, 160 N. E. 163. The complaint contended in its bill that the payment was involuntary and made under protest. A temporary injunction was issued, and subsequently the case was tried upon an amended bill and the answer thereto, oral testimony, and a stipulation of facts. The bill was dismissed for want of equity, and a writ of error brings the case here.

The General Assembly in 1927 enacted the Motor Fuel Tax Act, requiring distributors of motor fuels in this state to pay a tax of 2 cents per gallon on all motor fuel sold or used by them, with an allowance of 3 per cent. reduction for evaporation and other loss, and with provisions for the imposition of penalties in case distributors failed or refused to comply with the act. At that time, and for a number of years prior thereto, the complainant was engaged in the business of distributing motor fuel as defined in the act but dealt almost exclusively with firms maintaining fleets of motor-driven vehicles, among them the Parmelee Company, the Chicago Motor Coach Company, the Hertz Drive-Ur-Self Company, and the Yellow Cab Company. The complainant corporation was a large one, having in excess of half a million dollars invested in its business. Bearing a good reputation, to have become known as a trade violator would have worked serious injury to its business, which was highly competitive. After the act went into effect, the complainant held a conference with its customers, and the consensus of opinion among them was that the law was invalid. In order to hold its business, the complainant was under the necessity of preventing it from being destroyed or interrupted by agreeing with its customers that it would apply for a distributor's license under the act, pay the taxes imposed under protest, and then seek to recover them for the benefit of its customers without expense to them. Having secured the license to distribute motor fuel under the act, the complainant commenced remitting tax payments to the department of finance. These payments were always accompanied by a protest against making a payment. The protests were based upon the the supposed invalidity of the act, while the payments were made, as alleged, because it was compelled to do so by the fear of loss or destruction of its business. Of all the payments made, only the last one-that of February 18, 1929, for the period and amount mentioned-is in litigation. Accurate records of all motor fuel sold after the act went into effect were kept by somplainant, so that at all times it knew the names of purchasers, their addresses, amount of motor fuel bought, in gallons, and the tax paid on the gasoline sold to each customer. The remittance in question was accompanied by this protest: ‘We are herewith sending you check of the Benzoline Motor Fuel Company, No. 20598, in the sum of $24,268.90, being amount of gasoline tax pursuant to notice heretofore sent us and which we are sending to you and paying to you under protest, as we believe that the law under which said tax is imposed is unconstitutional and null and void. Inasmuch as legal proceedings are at the present pending to test the validity of said law, we are making this payment under protest, so as to enable the Benzoline Motor Fuel Company to obtain a re-payment of all moneys paid under and by virtue of the provisions of said act.’

Several motor fuel distributors brought suit to secure a refund of tax moneys paid under the act. These suits, upon review by this court, were decided against the distributors.Richardson Lubricating Co. v. Kinney, 337 Ill. 122, 168 N. E. 886; Indian Refining Co. v. Bollinger, 337 Ill. 122, 168 N. E. 886;Standard Oil Co. v. Bollinger, 337 Ill. 353, 169 N. E. 236;Agni Motor Fuel Co. v. Kinney, 340 Ill. 17, 172 N. E. 39;Standard Oil Co. v. Bollinger, 348 Ill. 82, 180 N. E. 396. Of those cases the Standard Oil Co. Case last cited was the only one where the trial court heard evidence. All of the others were decided solely upon the pleadings. In the Richardson Case, with which was consolidated the Indian Refining Co. Case, the question of duress was raised by the facts set forth in the bill and answer, and upon those two pleadings, which this court necessarily had to assume to be true, we based our decision. The Agni Motor Fuel Co. Case contained identically the same situation as the Richardson Case. The first Standard Oil Co. Case, 337 Ill. 353, 169 N. E. 236, differed from the others only in containing an apparent protest. The bill and answer in that case, however, showed that the Standard Oil Company had no way of reimbursing its customers and would profit from a decree in its favor at the expense of customers who in reality had paid the tax money. The last Standard Oil Co. Case cited (348 Ill. 82, 180 N. E. 396) was really a reappearance in this court of the case reported in volume 337 for a determination of the correctness of the decree of the chancellor dismissing the bill for want of equity after the injection into the case of new averments and new evidence in their behalf. At the second hearing new averments were coupled to the original averments. In substance, the new averments stated that a portion of the tax sought to be refunded represented a tax upon motor fuel used by the Standard Oil Company in its own vehicles; that certain of the customers of the company protested the payment of the tax to it; that to these protesting customersthe company agreed to make an attempt to recover the tax paid by them, and, should it succeed, a ratable restitution would be made. The company averred that it had never disclaimed an obligation to refund to its protesting customers the tax recovered, and that it proposed to, and would, refund to bona fide protesting customers the amounts, figured on a pro rata basis, of all tax money recovered, this action being predicated upon an agreement to repay tax money recovered upon the pro rata amount of net recovery. The company additionally averred payment of the tax because of a fear that the state would enforce the penalties of the act against the company, and that the payments were therefore involuntary and made under duress. It was further averred that the tax money was held in trust by the director for the benefit of the company. The answers responding to the new averments denied the existence of a trust or the making of threats to compel the payment of the tax by the company. The answer further denied any injury to the company, inasmuch as the money was collected as a tax from the ultimate consumers and they had not been reimbursed by the company, which stood by all the time knowing that the consumer paid the tax; that the company had made no effort from August, 1927, to January, 1928, to recover the tax money, because it knew the proceeds thereof were to be used on the hard road system of the state, thereby increasing the business of the company; and that the tax was paid voluntarily and not under any duress. A plea of res adjudicata was also filed, upon the theory that the prior adjudiciation definitely settled all issues. The chancellor held the plea of res adjudicata good, that the allegations in the answers were supported by the evidence, and entered a decree dismissing the bill for want of equity. This court, in affirming the decree of the chancellor anent the new averments and the plea of res adjudicata, held that the facts tended strongly to prove that the tax payments were made voluntarily despite the making of protests by the company. We concluded that the averments of promises by the company to return to customers their pro rata share of the tax money recovered were insufficient to show an obligation on the part of the company to return any of the tax money paid in by it. The plea of res adjudicata was held good by this court, as the issues involved were settled in the prior cases and the new averments and evidence thereon were not of such character as to require a different conclusion.

The last Standard Oil Co. Case, in volume 348 of the Illinois Reports (180 N. E. 396) has been considered in some detail because the complainant here argues energetically that the former rule laid down cannot be applied here on account of the great difference in material facts. We must admit that a material difference in facts exists in the present case distinguishing it from the former cases cited. This difference in facts bears directly upon the question whether the payments made by the complainant were made voluntarily or under duress. The evidence here established the fact that the complainant and its customers, who have a direct and substantial interest in the present...