Chicago Motor Club v. Kinney

• Decision Date: 24 February 1928
• Docket Number: No. 18510.,18510.
• Citation: 329 Ill. 120,160 N.E. 163
• Parties: CHICAGO MOTOR CLUB v. KINNEY, State Treasurer, et al.
• Court: Illinois Supreme Court

329 Ill. 120

160 N.E. 163

CHICAGO MOTOR CLUB

v.KINNEY, State Treasurer, et al.

No. 18510.

Supreme Court of Illinois.

Feb. 24, 1928.

Suit by the Chicago Motor Club against Garrett Kinney, State Treasurer, and others. Decree for defendants and plaintiff appeals.

Reversed and remanded, with directions.

Appeal from Circuit Court, Kane County; John K. Newball and William J. Fulton, Judges.

Miller, Gorham, Wales & Noxon and Joseph H. Braun, all of Chicago, and Ellis & Western, of Elgin, for appellant.

Oscar E. Carlstrom, Atty. Gen., and montgomery S. Winning and S. S. Du Hamel, both of Springfield, for appellees.

THOMPSON, J.

This appeal is from a decree of the circuit court of Kane county sustaining a general demurrer to and dismissing for want of equity an amended bill for injunction filed by the Chicago Motor Club, a corporation, as a taxpayer seeking to enjoin appellee, A. C. Bollinger, as director of the department of finance, for collecting the tax imposed by the act entitled, ‘An act to impose a license tax on the sale and use of motor fuel,’ approved June 29, 1927 (Laws 1927, p. 758), and appellees Garrett Kinney, as treasurer, Oscar Nelson, as auditor, and Bollinger, as director, from disbursing, using, or expending any of the funds appropriated by the act entitled, ‘An act making appropriations to the department of finance to carry out the provisions of ‘An act to impose a license tax on the sale and use of motor fuel,’' approved on the same day (Laws 1927, p. 44).

Section 1 of the act imposing the tax defines motor fuel as ‘all volatile and inflammable liquids produced or compounded for the purpose of, or which are suitable and practicable for operating motor vehicles,’ excepting kerosene, and defines a distributor as ‘a person who for sale or use in this state either imports into this state or produces, refines, compounds or manufactures in this state motor fuel.’ Section 2 provides for the licensing of distributors. Section 3 requires those acting as distributors on the 1st day of August, 1927, to file an inventory of motor fuel on hand. Section 4 requires those acting as distributors after July 31, 1927, to report to the department of finance on or before the 20th day of each calendar month the amount of motor fuel purchased, imported, produced, refined, compounded, manufactured, received, sold, distributed, or used by them during the preceding calendar month and the amount on hand at the close of business for such month. Section 5 reads:

‘At the time of making the monthly return, the licensee shall pay as a license tax to the department of finance, two cents for each gallon of motor fuel sold or used by him during the period covered by the return. In making the computation of tax due, three per cent. shall be deducted from the total amount of motor fuel sold or used by the licensee as an allowance for evaportation and other loss. * * * All money received by the department as license taxes under this act shall be deposited in the special fund in the state treasury known as the road fund.’

Section 6 reads:

‘After deducting the expense of administering this act, and the refunds provided for in section 10, from the total amounts of license taxes collected in each calendar year, the department of finance shall apportion, as hereinafter provided, to the several counties of the state, as soon as may be after the end of the calendar year, fifty per cent. of the net amount collected in 1927, and in each succeeding year. The money shall be apportioned to the several counties in each year, in proportion to the amount of motor vehicle license fees received from the residents of each county in the state, during the preceding calendar year.’

Section 7 reads:

‘Money apportioned to the several counties shall be used only for one or both of the following purposes, as the particular county may desire. 1. In case a county has outstanding bonds issued, or obligation incurred for the purpose of constructing state-aid roads, such construction having been or to be in accordance with section 15d of article 4 of ‘An act to revise the law in relation to roads and bridges,’ approved June 22, 1913, as amended, such money or any part thereof may, by resolution of the county board be used for the purpose of retiring such bonds and paying such obligations. 2. Any county may also use any money apportioned to it, in the construction of state-aid roads, in the manner provided for the use of county funds for such work by section 15d of article 4 of ‘An act to revise the law in relation to roads and bridges,’ approved June 27, 1913, as amended. However, no refund or further contribution shall be made by the state for such construction, nor shall the county in order to use the money apportioned to it, be required to provide or appropriate any county funds for such construction. * * * So far as practicable, priority in the manner of construction with these funds in any county, shall be given stateaid roads which will connect with the state bond issue routes numbered 1 to 185, inclusive, those incorporated municipalities which are not now upon any of these routes. All highways so constructed shall be maintained in accordance with article 4 of said act.'

Section 8 makes provision for collecting the tax on the first transfer after motor fuel which is imported into the stated loses the character of an interstate shipment.Section 9 requires every licensed distributor to keep records and makes these records subject to inspection by the department of finance. Section 10 reads:

‘Any person who uses motor fuel (upon which the license tax imposed by this act has been paid) for any purpose other than operating a motor vehicle upon the public highways of this state, shall be reimbursed and repaid two cents on each gallon of motor fuel so used. Claims for such reimbursement shall be made to the department of finance duly verified by the affidavit of the claimant, * * * upon forms prescribed by the department. The claim shall state such facts relating to the purchase, importation, manufacture or production of the motor fuel by the claimant as the department may deem necessary and the time when and the specific purpose for which it was used. * * * The department may make such investigation of the correctness of the facts stated in such claims as it deems necessary. When the department has approved such claims, it shall pay to the claimant the reimbursement therein provided out of any moneys appropriated to it for that purpose.’

Section 11 gives the department of finance authority to make reasonable rules and regulations relating to the administration and enforcement of the provisions of the act, and section 12 fixes penalties for persons failing or refusing to comply with the act. Section 13 gives the department of finance the right to revoke the license of a distributor for violations and the right to apply to a court of equity for an injunction to restrain the operations of distributors who refuse to comply with the act. Section 14 rends:

‘It is the purpose of this act to impose a license tax once upon either the sale or use of each gallon of motor fuel sold, or used within the state for the purpose of operating motor vehicles upon the public highways, so far as the same may be done under the constitution and statutes of the United States and the constitution of the state of Illinois.’ Smith-Hurd Rev. St. 1927, p. 2334.

It is clear that the tax levied by this act is an excise. Bowman v. Continental Oil Co., 256 U. S. 642, 41 S. Ct. 606, 65 L. Ed. 1139;Foster & Creighton Co. v. Graham, 154 Tenn. 412, 285 S. W. 570, 47 A. L. R. 971;Gafill v. Bracken, 195 Ind. 551, 145 N. E. 312,146 N. E. 109;State v. Hart, 125 Wash. 520, 217 P. 45;Altitude Oil Co. v. People, 70 Colo. 452, 202 P. 180. It is an occupation tax imposed upon distributors of motor fuels as defined in the act. It is a charge on the business of distributing motor fuel imposed for the purpose of raising revenue for the purposes mentioned in the act and measured by the number of gallons of motor fuel sold or used. In exercising its power to tax a business, the Legislature is specifically required by section 1 of article 9 of our state Constitution to tax ‘by general law, uniform as to the class upon which it operates,’ and under both the national and state Constitutions it is specifically prohibited from passing any law which will deprive any person of his property without due process of law. Section 13 of article 4 of our state Constitution provides:

‘No act hereafter passed shall embrace more than one subject, and that shall be expressed in the title,’ and ‘no law shall be revived or amended by reference to its title only, but the law revived, or the section amended, shall be inserted at length in the new act.’

Section 20 of article 4 provides that the state shall never in any manner give, loan, or extend its credit to or in aid of any corporation, association, or individual. By its amended bill, appellant invokes these provisions of the national and state Constitutions in its attack upon the constitutionality of the law imposing the tax in question, and makes seven specific charges against the validity of the act.

The first point which we shall notice is that challenging the validity of the act on the ground that section 6 amounts to an amendment of section 36 of the Motor Vehicle Act. Said section 36 provides:

‘All moneys received by the secretary of state as registration fees and for the examination and licensing of chauffeurs, as provided in this act, shall be deposited in the state treasury and set apart as a special fund to be known as the road fund. The road fund shall, shall, if and when the state of Illinois shall incur any bonded indebtedness for the construction of permanent highways, be set aside, and used for the purpose of paying and discharging annually the principal and interest on such bonded indebtedness then due and payable, and for no other purpose, and...