Central Ill. Public Service Co. v. Thompson

• Decision Date: 18 November 1953
• Docket Number: 32964,Nos. 32963,s. 32963
• Parties: GENTRAL ILLINOIS PUBLIC SERVICE CO. v. THOMPSON, County Treasurer.
• Court: Illinois Supreme Court

Page 888

115 N.E.2d 888

1 Ill.2d 468

GENTRAL ILLINOIS PUBLIC SERVICE CO. v. THOMPSON, County Treasurer.

Nos. 32963, 32964.

Supreme Court of Illinois.

Nov. 18, 1953.

Inghram & Dittmeyer, Quincy, and Stevens, Herndon & Nafziger, Springfield, for appellant.

H. David Condron, State's Atty., and William J. Dieterich, Quincy, for appellee.

DAILY, Justice.

Appellant, the Central Illinois Public Service Company, having previously paid its taxes for the years 1950 and 1951 in full, though partially under protest, filed separate petitions in the county court of Adams County seeking the return of $27,313.50 paid under protest for 1950, and of $31,412.63 paid under protest for 1951. The basis for both protests was that the amounts objected to represented illegal, unauthorized and void taxes extended against appellant's property; the subsequent petitions set forth the allegations of invalidity in detail. In each case, the county court entered an order which allowed some of the refunds sought, but denied others, and appellant now prosecutes separate appeals from the portions of the orders denying relief. Inasmuch as identical issues appear in each appeal, we have, on motion of the parties, consolidated the causes for review.

The county's budget and annual appropriation ordinance pertaining to 1950 taxes contained, under amounts to be levied for general county purposes, items totalling $9075 for expenses of the 'Office of the Supervisor of Assessments,' an office created in 1949 when the sixty-sixth General Assembly enacted House Bill No. 663 into a law. (Laws of 1949, p. 1261.) Appellant seeks to recover the amounts levied for, and applied to, the payment of these items, contending that the county was without authority to appropriate funds or to levy taxes for such expense, for reason that the law creating the office of supervisor of assessments was found to be unconstitutional and void in Giebelhausen v. Daley, 407 Ill. 25, 95 N.E.2d 84. (Opinion filed September 21, 1950-Rehearing denied November 17, 1950.) Appellant argues that any authority in the county to tax for this purpose must have emanated from this law and that the subsequent finding that it was unconstitutional puts the county in the position of never having had authority to tax for the expenses of the office. For this reason it is urged that the county court erred in denying a refund of the amount of the tax extended against appellant's property.

The county collector concedes that the act establishing the office has been found unconstitutional but argues that it does not follow that everything done pursuant to the act is invalid, particularly when as here, the office was established and performed its services and the county, in good faith, became liable for the expenses of the office. In support of his position that the void taxes extended for this purpose need not be refunded, the collector relies upon the broad principle that absolute retroactive invalidity is not always justified. Appellant insists that grants of power to levy taxes require strict construction in all that tends to protect the taxpayer and that, the grant of power being unconstitutional and void, the tax itself is void.

We find that prior to 1933, in cases which embrace real estate, personal property, privilege and other types of taxes, this court consistently followed the majority rule that a voluntary payment of taxes made under a mistake of law, but with full knowledge of the facts, could not be recovered even though paid under protest. This was true even where the taxes paid were based upon a statute subsequently found to be unconstitutional. See: Yates v. Royal Ins. Co., 200 Ill. 202, 65 N.E. 726; Walser v. Board of Education, 160 Ill. 272, 43 N.E. 346, 31 L.R.A. 329; Otis v. People ex rel. Raymond, 196 Ill. 542, 63 N.E. 1053; Board of Education v. Toennigs, 297 Ill. 469, 130 N.E. 758; School of Domestic Arts and Science v. Harding, 331 Ill. 330, 163 N.E. 15; Richardson Lubricating Co. v. Kinney, 337 Ill. 122, 168 N.E. 886; Standard Oil Co. v. Bollinger (two cases), 337 Ill. 353, 169 N.E. 236, and 348 Ill. 82, 180 N.E. 396; Prescott v. City of Memphis, 154 Tenn. 462, 285 S.W. 587, 48 A.L.R. 1381; 74 A.L.R. 1301. The issue in many of the cited cases resloved itself into a question of whether the payment of the invalid tax had been voluntary or involuntary, and it was held that a payment made under pressure of process immediately available to enforce collection was not a payment under compulsion but a voluntary payment. In People ex rel. Sweitzer v. Orrington Co., 360 Ill. 289, 195 N.E. 642, it is pointed out that such rigid rules were necessary, at least insofar as they were applied to real property taxes, for reason that there was no statute prohibiting the filing of objections to a tax without a prepayment of some part thereof, nor a statutory provision which allowed a recovery of taxes not paid under duress. As a practical matter, it appeared that numerous taxpayers filed objections merely to delay payment as long as possible, with the result that courts were clogged with tax matters and the taxing bodies were constantly harassed by their lack of the funds so tied up.

In 1933, the legislature amended certain sections of the Revenue Act of 1872 and, by section 162 thereof, made a formal protest and payment of seventy-five per cent of real-property taxes as a condition precedent to the recovery of taxes paid under protest. (Laws of 1933, p. 912.) Other amendments permitted said taxes to be repaid if their invalidity was established. The amendments referred to came before this court in 1935 in People ex rel. Sweitzer v. Orrington Co., 360 Ill. 289, 195 N.E. 642, 644, where the court had this to say: 'The objectives of the amendments are manifest. They indicate a purpose to facilitate the collection of taxes and to protect the taxpayer, who is by law compelled to pay at least 75 per cent. of the taxes objected to as a condition precedent to his right to file objections and to be heard in court. It is plain that the amendment to section 191 contemplates the refund of money whenever the tax objected to is held void and payment is shown to have been made under protest, as provided in said section. The provision for the refund is as mandatory as that for the payment. Appellee urges that the amendments apply only to rates, but no reason is advanced for the assertion, and the context clearly refutes the claim. It must also be observed that this legislation materially changed the situation with regard to the status of a taxpayer who desires to object to his taxes. It is to be presumed that the legislature knew the law as to voluntary payments. The amendatory act shows that, when it took away the right to object to taxes without restriction, it purposed to compensate the taxpayer for the imposition of an advance payment by a provision for a refund of any illegal tax so advanced. In the exercise of its legislative function the General Assembly had the right to so provide, regardless of whether the payment is deemed to be voluntary or involuntary. Fenske Bros. v. Upholsterers Union, 358 Ill. 239, 193 N.E. 112, (97 A.L.R. 1318).'

Following the opinion in the Orrington case, the legislature, in 1937, further amended the Revenue Act by adding thereto section 162a, which makes a formal protest and payment of all personal property taxes a condition precedent to the recovery of taxes paid under protest, provides for petition and hearing in the county court, and directs that the court 'shall pronounce judgment as the right of the case may be, and if the court finds for the petitioner, it shall enter judgment directing the County Collector to return to the petitioner all or a proper part of the personal property taxes paid under protest.' (Laws of 1937, p. 1049.) It is this section upon which appellant's petition for refund is based. Ill.Rev.Stat.1949, chap. 120, par. 676.

When the chronology of the legislation and the Orrington Co. case is considered, we think it manifest that the legislature, in adding section 162a to the Revenue Act, intended thereby to protect those who wished to protest against their personal property taxes from the rigid rules which had attached to voluntary payment and to compensate them for having to pay an illegal tax in advance by providing a definite manner and right of refund. As was observed in the Orrington case, the provisions of the statute providing for a refund are just as mandatory as those requiring an advance payment. For this reason, therefore, we hold that we are precluded from any consideration of whether the admittedly void taxes complained of were nonetheless justified. Appellant has fully complied with the statute and the record shows that the authority from which the county gathered its power to levy for the expenses of the office of supervisor of assessments has been held to be unconstitutional and void. We believe that the statute, which was designed to prevent promiscuous and dilatory filing of tax objections as well as to provide some measure of protection to those who were public spirited enough to pay their taxes, was intended to apply to the exact situation of this case. It is our conclusion that the trial court erred in denying a refund of the taxes levied for the expenses of the office.

Next to be attacked by appellant are taxes extended both in 1950 and 1951 for tuberculosis sanitarium purposes. The pertinent facts show that in August, 1946, the board of supervisors adopted a resolution, as required by section 27 of the Counties Act (Ill.Rev.Stat.1945, chap. 34, par. 27), providing for the levy of an additional tax for tuberculosis sanitarium purposes, said additional tax to be in excess of the maximum statutory rate for county purposes and for a period of ten years. Further, in compliance with section 27, the resolution stated that the excess required would be substantially the sum of $50,000 per year and resolved that an...